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Issue Report: Home Equity Loans

Is taking out a home equity loan a good idea?

This Issue Report aims to help you determine whether to take out a home equity loan, and partner ConsumersAdvocate.org can help you determine which home-equity-loan provider to choose with its Top 10 List. Home equity loans enable homeowners to borrow money against the equity they’ve accumulated in their homes. There are two types of home equity loans: fixed-rate loans and home equity lines of credit (HELOCs). Fixed-rate loans offer a single lump-sum payment to borrowers, which is then repaid in fixed monthly payments over a defined period. HELOCs are variable-rate loans that operate more like credit cards – you are allowed to borrow up to a certain amount for the life of the loan, and during that time you can withdraw money as you need it. Both kinds of home equity loans can be used in a wide variety of ways, helping borrowers: fund home improvements, consolidate higher-interest debt, start a business, buy a car, or pay for college, among many other uses (only some of which are prudent). The choices on whether to take out a home equity loan and also how to use one center around a number of questions: Are the benefits worth the risks, such as the risk of defaulting and losing one’s house? Are home equity loans cost effective when taking into account their relatively low interest rates, various fees involved, and alternative financing mechanisms? What are the different uses of home equity loans and what are each of their pros and cons? How do home equity loans compare with cash-out refinancing? And lastly, what are the pros and cons of fixed-rate home equity loans vs. home equity lines of credit? The arguments and relevant sources are framed below. If you would like to compare providers of home equity loans, HELOCs, and cash-out refinancings, see ConsumersAdvocate.org.

Risk: Is taking out a home equity loan worth the risk?

Risks of home equity loans can be mitigated by prudence

Amy Fontinelli, "4 smart moves for using home equity loans", Interest.com, August 7, 2017:

 “Limit your use of equity. During the housing bubble, consumers used home equity borrowing to pay for everything from boats and gambling junkets (clearly bad) to cars and kitchen renovations (not so bad). The problems these homeowners experienced during the financial crisis and recession taught us that even some ‘not so bad’ spending should be scratched from our list of acceptable uses. So, while we used to say that financing a car with a HELOC was OK, we no longer believe that. Ditto for discretionary home-remodeling projects. We now think savings is the only prudent way to pay for renovations such as updating a kitchen or bathroom. (Home improvements will boost the market value of your home. But contrary to what you see on television, you will recoup only a portion of any project’s cost. For every $100 you spend, your property value will only increase by $70 to $80, maybe less.)”

Home equity loans eliminate risk of variable interest rates

"Home Equity Loan Pros and Cons", Free and Clear

“Fixed Interest Rate Provides Certainty. Most home equity loans charge a fixed interest rate that cannot change as compared to a home equity line of credit (HELOC) or adjustable rate mortgage (ARM) when the interest rate can change and possibly increase significantly over the life of the loan. A fixed interest rate means your home equity loan monthly payment does not change, offering certainty and peace of mind to borrowers. A fixed rate home equity loan is especially beneficial to borrowers if interest rates are low or if rates are expected to increase in the future.”

Home equity loans create a risk of losing your home

"Is a home equity loan a good way to pay off my credit card debt?", Investopedia, June 12, 2017:

“The most important aspect of a home equity loan is the risk you take by securing the loan with your home as collateral. In the event you are unable to repay the loan, your house can be seized and sold by the lender to collect on funds owed. For many families, this risk may be too great. Credit scores are repairable, but uprooting your family due to foreclosure is not as easy to fix.”

Home equity loans can feed a risky & damaging cycle of debt

"Best Cash-Out Refi & Home Equity Loans 2017," ConsumersAdvocate.org, June 13, 2017:

“The main issue with home equity loans is maintaining a cycle of debt, in which borrowers spend, borrow, and then continue to spend irresponsibly.”

If home value falls after improvement, can be underwater on 2 loans

"The 4 Steps to Taking Out a Home Equity Loan", ConsumersAdvocate.org, April 17, 2017:

“If you are using a HELOC to make home improvements, will those improvements likely add value to your home? If your home does not appreciate in value, or if it in fact depreciates, you are going to owe for two loans, the initial mortgage and second mortgage. This could put you in a situation where you owe more than the property is worth.”

Cost effective: Is a home equity loan cost effective?

Home equity loans enable quick access to inexpensive cash

"Home Equity Loans v. Cash-Out Refinancing", ConsumersAdvocate.org:

“At various times in life for a variety of reasons, people might find they are in need of some cash. Instead of applying for an expensive personal loan from a bank or using their high-interest credit cards, it is better for them (meaning it is more financially advantageous) to tap the equity in their home.”

Home equity loan interest rates are generally very low

"Is a home equity loan a good way to pay off my credit card debt?", Investopedia, June 12, 2017:

“One of the great advantages to using a home equity loan to pay off your credit card debt is the low interest rate afforded to these secured loans. Most home equity loan rates are just a step higher than primary mortgage rates, and they are usually much lower than any of the high rates on your credit cards.”

Total interest payments are generally lower on home equity loans

"Home Equity Loan Pros and Cons", Free and Clear:

“Lower Total Interest Expense Over Life of Loan. The total interest expense borrowers pay over the life of a home equity loan is usually less than the total interest when you refinance your existing mortgage. This is because a home equity loan is usually smaller than a new mortgage when you refinance — a smaller loan means you pay less interest expense. Additionally, term for a home equity loan is usually five to twenty years, with fifteen years being the most common term. By comparison, 30 years is the most common length for a mortgage, although it is certainly possible to get a mortgage with a shorter term. Because home equity loans are smaller and shorter in duration, borrowers pay less interest over the term of the loan even though the interest rate on a home equity loan may be higher than the interest rate on a mortgage.”

Home equity loans can be used to consolidate loans

"Why Home Equity Can Be a Smart Borrowing Solution", Capital One, May 22, 2017:

“Consolidate your balances. If you’re trying to pay off credit cards, auto loans or other types of debt, a home equity loan or line of credit can be a way to consolidate those balances and see if you could lower your payments. Because you may be able to get a lower rate on a home equity loan or line than on other types of credit, the total interest you’ll eventually pay could be less than paying off each loan individually. Do the math to figure out if you could reduce your current payments.”

Home equity loan interest may be tax deductible

"Why Home Equity Can Be a Smart Borrowing Solution", Capital One, May 22, 2017:

“Interest may be tax deductible. Unlike the interest you pay on some other types of loans, the interest on your home equity loan or line of credit may be considered tax deductible by the IRS, similar to the way your original mortgage is treated. Before using home equity funds, be sure to talk to a tax professional to verify whether your interest will be tax deductible.”

A home equity loan can make it easy to overspend

"Home equity loan pros and cons", MortgageLoan.com, Dec. 9, 2015:

“Home equity loans can make it easy to overspend. If you only need to borrow $7,000 for a home improvement project but took out a home equity loan or line of credit for $15,000, there can be a real temptation to start dipping into the extra $8,000 for odds and ends. Before you know it, you’ve blown through the whole thing.”

Home equity loans involve costs like appraisal fees & other expenses

"Is a home equity loan a good way to pay off my credit card debt?", Investopedia, June 12, 2017:

“a home equity loan can also be more expensive than a similar debt consolidation loan, as it requires an appraisal of the home, along with other fees that are typically seen in a primary mortgage transaction.”

Home equity loans can include pre-payment penalties

"Home Equity Loan Pros and Cons", Free and Clear:

“Potential for Additional Fees. Some lenders charge extra fees and pre-payment penalties for home equity loans. Although borrowers are usually required to pay an appraisal report fee, other closing costs for a home equity loan should be lower than for a refinance. Borrowers should be aware of any extra fees including pre-payment penalties before selecting a home equity loan lender.”

Home equity loans have higher i-rates than 1st mortgage, HELOC

"Home Equity Loan Pros and Cons", Free and Clear:

“Higher Interest Rate than First Mortgage or HELOC. The interest rate on a home equity loan is typically 1.0% to 2.5% higher than the current market interest rate for a first mortgage and also higher than the initial interest rate on a home equity line of credit. The higher interest rate increases the monthly loan payment for a home equity loan. Borrowers should shop lenders to find the home equity loan with the lowest interest rate and fees.”

Home equity loan amount is fixed, reducing flexibility

"Home equity loan pros and cons", Free and Clear:

“Fixed Loan Amount. With a home equity loan, your loan amount is fixed and you do not have the ability to take additional proceeds even if you pay down your loan balance over time. By comparison, with a home equity line of credit borrowers can pay down their loan balance and take additional proceeds by drawing down the line an unlimited number of times. Receiving all home equity loan proceeds up-front reduces your financial flexibility as compared to a HELOC.”

Uses: What are the uses of home equity loans and their pros and cons?

You can use a home equity loan how ever you like

"Home equity loan pros and cons", MortgageLoan.com, Dec. 9, 2015:

“There are no restrictions on how you use the money. While certain types of loans require that you justify your plans for the money – think of putting together a business plan for a business loan, for example – a home equity loan can be spent however you wish.”

A home equity loan can generate capital for many diverse uses

"Home Equity Loans v. Cash-Out Refinancing", ConsumersAdvocate.org:

“People use the equity in their homes for the following reasons: Home improvements, college tuition, to purchase a second home, vacation home or a rental property; to pay-off higher-interest-rate debt, such as credit cards or auto loans; vacations or other luxuries; investments (acquisition of stocks, bonds, etc.); for some kind of emergency.”

Home equity loans allow access to the precise proceeds you need

"Home Equity Loan Pros and Cons," Free and Clear:

“Access Only the Amount of Proceeds You Need. Borrowers using a home equity loan usually have a specific use of proceeds in mind and can target the loan size to meet their financial needs. While most lenders have a minimum loan size for home equity loans, home owners are usually able to borrow only the amount of money they need. The flexibility to access the specific amount of money you need with a home equity loan reduces your monthly loan payment, lowers total interest expense and prevents unnecessary borrowing.”

Home equity loans can fund home improvements and increase value

"Why Home Equity Can Be a Smart Borrowing Solution", Capital One, May 22, 2017:

“You could increase your home’s value. While funds borrowed through a home equity loan or line of credit can be used for almost anything—your children’s education or medical expenses, as examples—one of the main uses is for home-improvement projects. When you use the equity in your home for renovations or improvements, you may be increasing the value of your investment. You’ll still have to pay interest on the money you borrowed, but you might be able to sell the home at a higher price or simply enjoy it more.”

Home equity loans can be used for down payment on another house

"Home Equity Loans", HGTV, 2017:

“The Piggyback Loan. During the real estate boom, home equity loans were often called ‘piggyback’ loans because they helped carry a home purchase, and they’re still used today for this purpose. Say you need 20 percent down to purchase a home but all you have is 10 percent. If the home’s value and your income and credit rating warrant it, you could get a HELOC for the other 10 percent, which would keep you from having to pay mortgage insurance.”

Home equity loans can be wisely used to pay off credit cards

Amy Fontinelli, "4 smart moves for using home equity", Interest.com, August 7, 2017:

“Use equity to cut your interest payments. Finally, it still makes sense to use a home equity line to pay off all of your high-interest credit cards and repay that debt at the home equity line’s lower interest rate. You’ll get out of debt faster by taking all (or at least most) of the money you needed to keep up with your credit card bills each month and sending it to your home equity lender instead. (Of course, you must refrain from running up big balances on your credit cards again, or you’ll defeat the whole purpose of the home equity line.)”

The utility of a home equity loan can lead to overuse

"Home equity loan pros and cons", MortgageLoan.com, Dec. 9, 2015:

“Repetition is another risk. After they’ve done one home equity loan, some people fall into the habit of using their homes as piggy banks, tapping into their equity repeatedly for nonessential spending.”

Using a home equity loan for vacations is a bad idea

"5 Reasons Not to Use Your Home Equity Line of Credit", Investopedia, April 28, 2016:

“Any time you use debt to pay for a vacation or to fund leisure and entertainment activities, it means you are living beyond your means. Although it is cheaper than paying with a credit card, it is still debt. If you generally can’t control your spending or you rely heavily on debt to fund your lifestyle, borrowing from home equity can only exacerbate the problem. At least with credit cards, you are only risking your credit. There is more at stake with home equity; namely, your home.”

Home equity loans should not be used to buy a car

"5 Reasons Not to Use Your Home Equity Line of Credit", Investopedia, April 28, 2016:

“With HELOC rates nearly half the rates offered on auto loans, it is tempting to use the cheaper money to buy a car. While it is true that your interest costs may be lower with a HELOC, if your financial situation only allows you to make interest-only payments on the loan, your interest costs may be higher over the long term. In addition, an auto loan is secured by your car. If your financial situation worsens, you stand to only lose the car. If you are unable to make payments on a HELOC, you may lose your house. Buying a car with a HELOC loan is not a good idea because it is a depreciating asset. With an auto loan, you pay down a portion of your principal with each payment, ensuring that, at a predetermined point in time, you completely pay off your loan. However, with most HELOC loans, you are not required to pay down principal, opening up the possibility of making payments on your car longer than the useful life of the car.”

Paying off credit car debt with a home equity loan is risky

"5 Reasons Not to Use Your Home Equity Line of Credit", Investopedia, April 28, 2016:

“It seems to make sense to pay off expensive debt with cheaper debt. After all, debt is debt. However, in some cases, this debt transfer may not address the underlying problem, which is the inability to live by your means. Before considering a HELOC loan to consolidate credit card debt, honestly examine the reason your credit card debt became so unmanageable in the first place, otherwise you may be trading one problem for an even bigger problem.”

Using a home equity loan to invest in real estate is hazardous

"5 Reasons Not to Use Your Home Equity Line of Credit", Investopedia, April 28, 2016:

“When real estate values were surging in the 2000s, it was common for people to borrow from their home equity to invest or speculate in real estate investments. As long as real estate prices were rising quickly, people were able to make money. However, once real estate prices started to fall, people became trapped, owning multiple properties that, in many cases, were valued less than their outstanding mortgages and HELOC loans. Although the real estate market has stabilized, investing in real estate is still a risky proposition because a lot of unforeseen problems can arise, such as unexpected expenses in renovating a property, or a sudden downturn in the real estate market. Especially if you are an inexperienced investor, real estate or any type of investment poses too big of a risk when leverage is used, particularly in the case of your home equity.”

Paying for college with a home equity loan is inadvisable

"5 Reasons Not to Use Your Home Equity Line of Credit", Investopedia, April 28, 2016:

“Because of their lower interest rates, you may rationalize tapping your home equity to pay for a child’s college education. However, doing this may put your house at risk, should your financial situation change for the worse. If the loan is significant and you are unable to pay down the principal within five to 10 years, you also risk carrying the additional mortgage debt into retirement.”

Vs. HELOC: How do home-equity loans compare to home-equity lines of credit?

Comparative features of home equity loan in a nutshell

"Home Equity Loans v. Cash-Out Refinancing", ConsumersAdvocate.org:

“Receive funds in lump sum, borrow a specific amount for a set period, fixed interest rate, regular monthly payments.”

Home equity loans best for those seeking definite loan at fixed rate

"HELOC or Equity Loan - Which one is right for you?", myFico:

“Who is this good for? People who want money for a one-time event and prefer the security of fixed-rate loans. This is a good option if you want to keep your existing mortgage and prefer to receive the cash in a lump sum. This is essentially a second mortgage where the rate is usually fixed and you repay both interest and principal each month. The payment is received as a lump sum and you cannot draw additional money from the loan. The interest rates are generally higher than HELOCs of the same amount because you have the security of a fixed rate. The interest is usually tax deductible for loan amounts up to $100,000.”

Lenders often place more limitations on HELOCs

In order to access a HELOC, one must use specially issued checks or a credit card and lenders typically require you to take an initial advance upon setting up the loan, withdraw a minimum amount every time you access the line of credit, and keep a minimum amount outstanding.

Variable interest rate of HELOCs can be a major risk

Amy Fontinelli, "4 Smart Moves for Using Home Equity", Interest.com, August 7, 2017:

“since today’s interest rates have almost nowhere to go but up, a HELOC’s variable interest rate could end up costing you much more over the loan term than a home equity loan’s fixed rate, even though the fixed rate is higher initially.”

Lenders can reduce/freeze your line of credit with HELOCs

Amy Fontinelli, "4 Smart Moves for Using Home Equity", Interest.com, August 7, 2017:

“HELOCs have another significant drawback. Lenders can freeze or reduce your line of credit without warning if they learn of a change in your financial circumstances or a drop in your home’s value. That means you can’t always count on a HELOC to be there when you want to use it.”

Comparative features of HELOC in a nutshell

"Home Equity Loans v. Cash-Out Refinancing", ConsumersAdvocate.org:

“Make loan advances as funds are needed, offers easy access for unexpected expenses, variable interest rate, fluctuating monthly payments.”

Home equity lines of credit operate more like credit cards

"Home equity line of credit vs. home equity loan", Bankrate:

“A home equity line of credit (HELOC) works more like a credit card. You are allowed to borrow up to a certain amount for the life of the loan — a time limit set by the lender. During that time you can withdraw money as you need it. As you pay off the principal, your credit revolves and you can use it again. Let’s say you have a $10,000 line of credit. You borrow $5,000, but then pay back $3,000 toward the principal. You now have $8,000 in available credit. This gives you more flexibility than a fixed-rate home equity loan. Credit lines have a variable interest rate that fluctuates over the life of the loan. Payments will vary depending on the interest rate and how much credit you have used. When the life span of a line of credit has expired everything must be paid off. A lender may or may not allow a renewal.”

HELOCs are better for when need money in staggered intervals

"Home Equity Line of Credit vs. Home Equity Loan", Bankrate:

“if you need money over a staggered period of time — for example, at the beginning of each semester for the next four years to pay for Jimmy’s schooling or for a remodeling project that will take three years to finish — a line of credit is the better choice. It gives you the flexibility to borrow only the amount you need, when you need it.”

Selecting a good HELOC may simply require finding right lender

There are a number of HELOC lenders and aggregators. ConsumersAdvocate.org listed Lending Tree, Rate Marketplace, and Chase as the top three in 2017.

Vs. Cash-Out Refinancing: How do home equity loans compare to cash-out refi's?

Home equity loan is faster, more efficient than cash-out refi

"Home Equity Loan Pros and Cons", Free and Clear:

“Save Time and Money as Compared to a Cash-Out Refinance. A home equity loan saves you time and money as compared to other methods for accessing the equity in your home such as a cash-out refinance.  Closing costs for a home equity loan are usually lower than for a refinance because the loan amount is smaller.  Additionally, the loan application and closing processes for a home equity loan are streamlined as compared to a full refinance.”

Cash-out refinancing entails expensive closing costs

"Home Equity Loans vs. Cash-Out Refinancing", ConsumersAdvocate.org, Feb. 16, 2017:

“Cash-out refinancing differs from a home equity loan in several ways: …You pay closing costs when you refinance your mortgage. You generally don’t pay closing costs for a home equity loan. Closing costs can amount to hundreds, if not, thousands of dollars.”

Cash-out refi only makes sense if new interest rate lower

"Home Equity Loans vs. Cash-Out Refinancing", ConsumersAdvocate.org, Feb. 16, 2017:

“It doesn’t make sense to do a cash out refinance if your new interest rate is higher than the interest rate on your current mortgage. It only makes sense if you are refinancing to a lower interest rate.”

Cash-out refi makes less sense if paid off most of mortgage

"Home Equity Loans vs. Cash-Out Refinancing", ConsumersAdvocate.org, Feb. 16, 2017:

“If you are 20 years into a 30-year mortgage and every month you’re paying off more principal than interest, it probably doesn’t make sense to do a cash out refinance. If you need cash, a home equity loan would be a better choice.”

Cash-out refi characteristics relative to home equity loans

"Home Equity Loans vs. Cash-Out Refinancing", ConsumersAdvocate.org, Feb. 16, 2017:

“Cash-out refinancing differs from a home equity loan in several ways: A home equity loan is a second loan on top of your first mortgage; A cash-out refinance is a replacement of your existing mortgage; The interest rates on a cash-out refinancing are usually lower than the interest rate on a home equity loan.”

Cash-out refi on primary mortgage can entail lower interest

"Home equity loan pros and cons", MortgageLoan.com, Dec. 9, 2015:

“Home equity loan fixed-rates are higher than what you’d pay for a fixed-rate primary mortgage. So you may be better off with a cash-out refinance, particularly if you can also reduce your primary mortgage rate in the process.”

Cash-out refinancing better when have strong equity, want refi

"HELOC or Equity Loan - Which is right for your?", myFico:

“Who is this good for? If you’ve built a lot of equity and want to refinance your entire mortgage, this is the way to go. There are many reasons to refinance, such as taking advantage of lower rates or switching from an ARM to a fixed-rate loan. If you plan to refinance and also want extra cash, this takes care of both. Details: This is a refinance where you’ve build enough equity to refinance for more than you currently owe and take the additional cash. This will increase your monthly payments because you are borrowing more. You should compare the rates for refinancing against those for equity loans to see which are better. The interest on the new mortgage is usually tax deductible.”

Cash-out refinancings have longer terms that spread out payments

"Home Equity Loans vs. Cash-Out Refinancing", ConsumersAdvocate.org, Feb. 16, 2017:

Because cash-out refinancing involves refinancing on an underlying mortgage, which are often 30-year fixed interest loans, payments on these loans are often beneficially spread out over thirty years, reducing month-to-month payments.

Vs. Reverse Mortgage: How does a home equity loan compare to a reverse mortgage?

Reverse mortgages deplete your equity in your home

"Reverse Mortgage vs. a Home Equity Loan", ConsumersAdvocate.org, April 12, 2017:

“Cons a reverse mortgage: Uses the equity in your home, leaving you and your heirs with fewer assets.”

Reverse mortgages can entail high fees and costs

"Reverse Mortgage vs. a Home Equity Loan", ConsumersAdvocate.org, April 12, 2017:

“Cons of reverse mortgages: High Costs: Counseling fees, appraisal fee, origination fees, upfront costs, and ongoing ones as well, such as a monthly servicing fee.”

Reverse mortgage can negatively impact eligibility for Medicaid, etc.

"Reverse Mortgages vs. Home Equity Loans", ConsumersAdvocate.org, June 12, 2017:

“Cons of a reverse mortgage: May impact your eligibility for Medicaid or Supplemental Security Income.”

Reverse mortgages wrongly assume home equity isn't doing anything

"The problems with reverse mortgages", The White Coat Investor, June 23, 2017:

“Perhaps the thing that bothers me the most about the reverse mortgage thing is the same thing that bothers me with those who advocate carrying a mortgage long into retirement and using HELOCs for various purposes during your career. They like to sell this concept that home equity isn’t “doing anything. It’s just sitting there being useless.” I vehemently disagree. The home itself provides “dividends.” That dividend is saved rent. Technically, that home provides the same dividend whether the home is paid off or if you have a 100% LTV mortgage on it. So what the home equity itself is really doing is reducing your interest cost for that home.”

Reverse mortgages are effectively loans with all their encumberances

"The problems with reverse mortgages", White Coat Investor, June 23, 2017:

“An important thing to understand about a reverse mortgage is it is a loan. With that loan, comes (almost) all of the problems with owing money to somebody else. These include having to pay interest, carrying the psychological burden of debt, and reduced future options. For example, if you borrow against something now, you can’t borrow against it later.”

Reverse mortgages in a comparative nutshell

"Reverse Mortgage vs. a Home Equity Loan", ConsumersAdvocate.org, April 12, 2017:

“A reverse mortgage works in the opposite way as a regular mortgage. Instead of making payments to a lender, the lender makes payments to you, based on a percentage of your home’s equity. Over time, this means your debt increases as your equity decreases. Though you continue to hold the title to your home, if you become delinquent on your property taxes or your insurance, the home falls into disrepair, you move, sell it or pass away—the loan automatically becomes due. If any of these scenarios occur, the lender will sell the home to recover the money that was paid out to you, as well as any associated fees, and any remaining equity goes to you or your heirs.”

Reverse mortgages are a steady long-term source of income

"Reverse Mortgage vs. a Home Equity Loan", ConsumersAdvocate.org, April 12, 2017:

“Generally speaking, a reverse mortgage works better as a steady, long-term source of income, whereas a home equity loan is best if you need a lump sum of short-term cash that you can repay.”

Reverse mortgages can help with cash-flow problems after retiring

"5 biggest advantages of reverse mortgage loans", Bankrate.com:

“For those lucky enough to have equity in their homes, a reverse mortgage loan can help with cash-flow problems when they stop working. Since there is no mortgage payment from the reverse mortgage loan, the money borrowed can be used to pay down debt, eliminate other reoccurring payments and enhance the lifestyle of the borrower.”

Reverse mortgages offer flexibility of payment how you want it

"Reverse Mortgage vs. Home Equity Loan", ConsumersAdvocate.org, April 12, 2017:

“Pros of reverse mortgages: Choose how the cash is paid out to you, whether as a lump sum, monthly advance, or line of credit.”

You can only owe as much as house's value with reverse mortgage

"Reverse Mortgage vs. Home Equity Loan", ConsumersAdvocate.org, April 12, 2017:

“If you outlive the loan (receive more payments than the house is worth), you won’t owe more than its value.