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Is a reverse mortgage or HELOC better for seniors? Experts weigh in
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Though easing inflation and the Federal Reserve’s recent rate cut should help to ease the pressure on many Americans, some are still struggling financially. That might mean turning to credit cards to make ends meet or, for homeowners, tapping their home equity.
For seniors, there are multiple ways to do this — and home equity lines of credit (HELOCs) and reverse mortgages are two of the most common.
Both let you borrow from your equity — and over an extended period, if you need to — but which one is best as you age and why? Here’s what experts have to say.
Find out more about your reverse mortgage loan options now.
When a reverse mortgage is better
Reverse mortgages work like traditional mortgages, but backward. Instead of you making payments to the lender, they pay you.
Those payments can come as a one-time lump sum, as monthly payments, in a line of credit, or some combination of these. You only repay the loan once you sell the house, move permanently or die.
For this reason, reverse mortgages can be a smart option if you “have limited income and would have a difficult time making your monthly payment,” says Rose Krieger, a senior home loan specialist at Churchill Mortgage.
Reverse mortgages can also be a good idea to explore if you’re not worried about passing your house on to heirs.
“It varies based on what your long-term plan is for the house,” says Jay Zigmont, a certified financial planner and founder of Childfree Wealth. “With a reverse mortgage, it needs to be paid off before the house can be transferred to someone else. If you are single, and don’t care about the house after you pass, a reverse mortgage may allow you to get more out than a HELOC.”
Explore how a reverse mortgage could benefit you today.
When a HELOC is better
If you can swing monthly payments, a HELOC may be a better option and could even save you money. That’s because reverse mortgages typically come with high fees, while HELOCs often have none (or very minimal ones if they do).
In fact, according to the Consumer Financial Protection Bureau, reverse mortgage lenders can charge up to $6,000 just for the origination fee alone.
“A reverse mortgage also comes with a mortgage insurance premium and requires an appraisal, whereas a HELOC often does not,” Krieger says.
A HELOC might be the better choice if you’re planning to use the funds for home improvements. This would qualify you for a valuable tax deduction and allow you to write off the interest you pay on your HELOC each year. With reverse mortgages, you’re typically rolling your interest costs into the loan balance, so this deduction just isn’t possible.
Learn more about the best HELOC options available to you today.
The bottom line
Both HELOCs and reverse mortgages can be valuable tools in the right scenarios. If you’re not sure which one is the best move for your finances — or you want to explore other options, like home equity loans or a cash-out refinance — talk to a mortgage professional. They can walk you through the pros, cons, and costs of each one.
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The Chicago White Sox on Friday broke Major League Baseball’s 62-year-old single-season record with the most losses during a season with their 121st defeat against the Detroit Tigers.
The White Sox lost the game 4-1. This came after they had won three games in a row against the Los Angeles Angels and had hovered at 120 losses.
On Thursday, the Sox shut out the Angels 7-0.
The 121 losses eclipsed the total that the 1962 expansion New York Mets recorded. The White Sox had already surpassed the 2003 Detroit Tigers, a team that lost 119 games, setting the American League record. MLB only counts records set in the modern era, which began in 1900, so the 1899 Cleveland Spiders’ all-time record of 134 losses is not included.
The incredible feat of futility was the culmination of a long, grueling season in which the White Sox recorded multiple double-digit losing streaks, including a 14-game skid from May 22 to June 6, and then an American League-record 21-game losing streak between July 10 and Aug. 5. All that losing led to the firing of manager Pedro Grifol during just his second season at the helm. In less than two seasons, Grifol led the team to more than twice as many losses as he did wins.
Grady Sizemore took over as interim manager for the rest of the season.
The White Sox then recorded another 12-game losing streak that lasted from Aug. 23 through Sept. 3.
Jeff Chiu / AP
It’s been a season unlike anything fans of the franchise, which will mark the 20th anniversary of its last World Series win next year, have ever seen. The team’s winning percentage through Sunday of .231 is still significantly behind the next-worst season in franchise history, the 1932 White Sox that went 49-102-1 and posted a winning percentage of .325.
Until this season, the White Sox team with the most single-season losses in franchise history was the 1970 team, which went 56-106. This year’s team is just the sixth in franchise history to record 100 or more losses in a season, according to Baseball Reference, which has team statistics going back to 1901, the year the American League formally organized.
“I feel your pain”
The White Sox record has been so bad that even the team’s official X (formerly Twitter) account has been having some fun with the piling up of losses lately.
On Sept. 18, after a loss to the Angels, the team’s post for its final score read, “FINAL: the other team scored more runs than us.”
Last Saturday, the team posted, “FINAL: can be found on the MLB app,” after a loss to the Padres.
Then on Sunday, the team’s account posted a version of a widely used GIF of a car attempting to quickly drive onto an exit ramp, representing the team’s social media administrator, turning away from posting the final score and instead opting for “literally anything else.”
The Sox kept it up on social media after the Friday night loss.
A post read:
Things we’d rather do than read comments:
- Get a root canal
- File taxes
- Eat 5,000 saltine crackers without water
- The cinnamon challenge
- Put ketchup on a hot dog
- Bear crawl across the Sahara Desert
- Walk barefoot on an L train
The post also showed a separate window on a computer desktop screenshot showing a dejected Southpaw White Sox mascot, with the text, “slams laptop shut til tomorrow.”
The situation even prompted famed horror writer and Boston Red Sox fan Stephen King to weigh in on social media.
“Chicago White Sox fans, I feel your pain,” King posted on X. “As a fan of those other Sox, I tried to switch my loyalty to Cleveland during one particularly awful season (Butch Hobson, I’m talking about you). I couldn’t do it. Things will get better. They CAN’T get worse.”
Mark J. Terrill / AP
Despite the jokes on social media, White Sox team leadership has faced questions about what went wrong and how the team has been withstanding the historically difficult season.
General Manager Chris Getz summed up the feelings of the organization last month when he spoke to members of the news media after Grifol’s dismissal.
“There was lack of production overall,” Getz said. “I mean you look at how many games that we’ve led early and weren’t able to finish or how many games we haven’t been able to come back to get a win. Obviously, there was something that was broken. We know the flaws in this roster, but with that being said, we expected to win more games. We did.”
After last Sunday’s loss to the San Diego Padres, the team’s 120th of the season to tie the major league record, Sizemore, in true manager fashion, attempted to downplay the importance of the historic mark for the club.
“No loss is good,” Sizemore said. “Like I said, it’s not something we’re focused on. I think probably everyone outside of this clubhouse will be more obsessed with it than us.”