Home equity conversion mortgage Meaning and Definition
Home Equity Conversion Mortgage
Pronunciation
/ˈhoʊm ɛkˈwɪti konˈvɝːrʒən mɔrtɡɪdˈ;
Part of Speech
Noun
Definition
A type of mortgage that allows homeowners to convert a portion of their home’s equity into cash, often used in retirement or to supplement income.
Examples
- The couple used a home equity conversion mortgage to fund their dream vacation.
- Home equity conversion mortgages can be a viable option for retirees with a significant amount of equity in their homes.
Synonyms
- Reverse Mortgage
- Home Equity Loan
Etymology
The term “home equity conversion mortgage” is a product of the financial industry, and its etymology is closely tied to the development of mortgage products.
Usage Notes
When referring to a home equity conversion mortgage, it’s important to note that it’s a complex financial product, and consumers should carefully consider the terms and conditions before signing.
Cultural References
Home equity conversion mortgages have been featured in various media outlets, including financial news networks and reputable publications.
Idiomatic Expressions or Phrases
“Unlocking the equity in your home”
Related Words or Phrases
- Mortgage
- Home Equity
- Equity
Collocations
- Home equity conversion mortgage rates
- Home equity conversion mortgage calculator
Frequency of Use
Home equity conversion mortgages are less frequently used than traditional mortgages, but they have gained popularity among retirees and seniors in recent years.
Common Misspellings
Home equity converstion mortgage
Additional Information
A home equity conversion mortgage allows homeowners to tap into the equity in their home without having to make monthly payments. However, the loan becomes due when the borrower either passes away or moves out of the home. Home equity conversion mortgages can be beneficial for retirees who need supplemental income or want to fund large expenses.
Home equity conversion mortgages are often confused with reverse mortgages, but the two products have distinct differences. Home equity conversion mortgages allow borrowers to borrow a lump sum of cash upfront, while reverse mortgages provide a line of credit or monthly payments.