How is a reverse mortgage different from a HELOC?

Both let you tap home equity, but they work very differently. A HELOC requires monthly interest-only payments during the draw period and full principal-and-interest payments during the repayment period — miss one and you risk foreclosure. HELOCs require income and credit qualification (lenders pulled and froze a lot of HELOCs in 2008 and 2020), the line can be reduced or canceled by the bank at any time, and the full balance becomes due if you sell. A reverse mortgage line of credit has no required monthly payment for as long as you live in the home, qualification is much easier (no income or credit minimum, just a financial assessment), the unused portion of the line actually grows over time at the same rate as the loan (so $200K of unused credit today might be $280K in ten years), and the bank cannot freeze or cancel it. For most Washington homeowners 62 and older the reverse mortgage line of credit is the more stable, more flexible long-term tool. For homeowners under 62 or those who plan to sell within a few years, a HELOC is usually the better fit.