How is Point different from a reverse mortgage?
With Point, you get many of the benefits of a reverse mortgage without the major drawbacks. As with a reverse mortgage, there are no monthly payments. A few key differences:
- There is no minimum age to use Point. You must be 62 years old to qualify for a reverse mortgage.
- Point doesn’t penalize you for taking a lump sum. With a reverse mortgage, choosing a lump sum costs more than getting monthly payments or a line of credit.
- You don’t have to pay off your mortgage to qualify for a Point Home Equity Investment (HEI). A reverse mortgage requires first lien position. That means that if you have a mortgage balance, you need to pay it off using funds from the reverse.
- Point's HEI is structured differently from traditional loans. Instead of being subject to an interest rate, you share a portion of your home value’s growth with Point. A reverse mortgage charges a predetermined interest rate, regardless of how your home value changes.
- You’ll never end up upside down on an investment from Point. If your home value drops beneath the Original Agreed Value your buyback cost will be smaller.
The Point agreement is assumable. Unlike a reverse mortgage or a regular mortgage, this means that your heirs can assume your Point agreement.