Comparisons
You have several options when it comes to converting the equity in your home into cash. Home equity loans (and home equity lines of credit), reverse mortgages, selling your home, and buying a less expensive home or renting, and the REX Agreement are four such popular options. When weighing these options, it is important to carefully and objectively consider the advantages and disadvantages of each.
Remember, everyone has different needs and circumstances, so what’s right for you may not be right for someone else. With that in mind, we invite you to take a close look at the comparison chart below. It’s a great way to begin your consideration process.
Also, visit our How It Works section to see specific comparisons for cashing out with no debt, buying a home for less, and restructuring debt.
| REX Agreement | Home Equity Loan | Reverse Mortgage | |
| Description | Not a loan; a real estate equity purchase agreement that converts equity into cash with no interest or payments—ever. | An interest bearing loan against your home that you pay back in monthly installments. | An interest bearing loan against your home that you (or your heirs) pay back when you sell or leave your home. |
| Maximum Funding | Typically 10 to 15 percent of your home’s value. | The higher the home value, the more you can borrow. | The higher the home value and the older the borrower, the more you can borrow. |
| Monthly Payments | No. | Yes. | No. |
| Is This Debt? | No | Yes. | Yes. Interest accrues even though you are not making monthly payments. |
| Interest Rate | None. | Based on current financial index, the borrower’s credit score, home value, and amount borrowed. May be a fixed or variable rate. | Based on current financial index. |
| Tax Implications | The Advance Payment of up to $300,000 is not taxable until you sell the home or end the REX Agreement. | In most cases, borrowers can deduct interest on loans up to $100,000. | Interest is not deductible until the loan is paid off in part or whole. |
| Is There A Minimum Age Requirement? | No. | No. | Yes. Homeowner must be 62 or older. |
| Income Qualifications | None. | Debt to income ratio can influence the interest rate | You defer interest payments, so you don’t need a minimum amount of income to qualify. |
| Can Money Be Used for Any Purpose? | Yes. | Yes. | Yes. |
| What Happens If the Home Value Declines? | EquityRock shares in the decline in value. | Does not reduce the amount you owe. | Does not reduce the amount you owe. |
| Term | Up to 50 years in most states | 5 – 10 year draw period followed by 10 – 20 year repayment period. | Until you sell or leave your home, or the owner passes away. |