Which of the following is NOT a typical feature of a reverse mortgage?

The correct answer is that monthly payments to the lender are not a typical feature of a reverse mortgage. In a reverse mortgage, the lender pays the homeowner rather than the other way around. This financial product is specifically designed for older homeowners, allowing them to convert part of the equity in their home into cash. In this way, the homeowner receives funds without needing to make monthly payments, which distinguishes it from traditional mortgages where the borrower pays the lender each month.

Home equity accumulation is an essential characteristic of a reverse mortgage as the homeowner retains ownership of the home and can continue to build equity as long as they live in the home. No repayment is required until the homeowner moves out, sells the home, or passes away, further highlighting the non-repayment feature that is unique to reverse mortgages. Additionally, borrowers can utilize the proceeds from the reverse mortgage for any purpose, whether it be for home renovations, paying off debt, or covering living expenses, which provides significant financial flexibility.

Overall, reverse mortgages serve a distinct purpose that differs notably from conventional loan structures, primarily focusing on enabling homeowners to access equity without traditional repayment obligations.