Traditional lenders who facilitate home loans for seniors, also known as home equity loans have a lending criteria mostly based on the appraised value of your home. A senior's credit score, or sources of income does not weigh heavily in the application. The significance of this is that you may not need to qualify like you would a traditional bank mortgage

When taking out a home equity loan the borrower  will receive the funds in a lump sum. The borrow would then be required to make monthly payments on the advance until the loan is repaid. Rates for a home equity loan are generally a little bit higher than standard prime mortgage rates.

Home equity loans are appropriate to borrowers who can afford monthly payments and require a larger advance than what a reverse mortgage can provide. Equity lenders do not generally lend beyond 60%  of the appraised value of your home.

Advantages of home equity loans

  • lending criteria is not based on credit score and income, rather based on the value of the home
  • You can borrow larger amounts, generally up to 60% of the home's appraised value.

Disadvantages of home equity loans

  • Probably slightly higher rates than prime mortgage rates
  • Must make monthly payments
  • Advances are made as a lump sum