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Owning your home and want to benefit from its equity can be a tricky situation – so it’s good to know the difference between reverse mortgage and line of credit loans.

There are several ways to get money “out” of your home, and depending on your age and credit status, it can be difficult to decide which way will cost you less in the long run. The first thing to think about when considering the difference between reverse mortgage and line of credit is whether you feel you will be able to repay your loan with timely payments. If you do not have good credit, or cannot repay a loan, a reverse mortgage may be your only viable option.

In California, The Home Equity Sales Contract Act is a comprehensive set of statutes designed to protect homeowners in default from unfair purchases of their home equity. The California legislature recognizes the equity value of a residence can be lost to an unscrupulous purchaser whenever a homeowner facing foreclosure succumbs to a proposal to sell his or her home for a fraction of its value.

Homeowners whose residences are in foreclosure are subject to fraud, deception, and unfair dealing by home equity purchasers.

The recent rapid escalation of home values, particularly in urban areas, has resulted in significant increases in home equity.