Which loan type is specifically designed to assist senior citizens with converting home equity into cash?

The loan type specifically designed to assist senior citizens with converting home equity into cash is the reverse mortgage. This financial product enables homeowners, typically aged 62 and older, to access a portion of their home’s equity without the obligation to make monthly mortgage payments. Instead, the loan is repaid when the borrower sells the home, moves out, or passes away.

Reverse mortgages can provide seniors with additional income during retirement, allowing them to cover living expenses or healthcare costs without needing to sell their homes. This way, they can maintain ownership of their property while still benefiting from its value.

In contrast, other loan types like a bridge loan are short-term loans meant to bridge the gap between the sale of one property and the purchase of another. A conventional mortgage is a standard home loan that requires regular monthly payments and is not tailored for equity conversion. Hard money loans are asset-based loans where the borrower receives funds secured by real estate collateral, typically used for short-term financing needs rather than for converting home equity for seniors.