Which type of mortgage allows for the borrower to defer a portion of their equity in cash, specifically designed for owners over 60 years old?

A reverse mortgage is specifically designed for homeowners aged 62 and older, allowing them to convert part of the equity in their homes into cash without having to sell the home. With this type of mortgage, the borrower does not make regular loan payments; instead, the loan amount, plus interest, is repaid when the homeowner sells the home, moves out, or passes away. This structure enables seniors to access funds to cover living expenses, healthcare, or other needs while still maintaining ownership of their property.

In contrast, other types of mortgages do not serve the same purpose for seniors. A wrap-around mortgage typically involves a seller financing the buyer while encompassing an existing mortgage. An agreement for sale is a contract where the buyer makes installment payments but does not initially hold title until the terms are satisfied. A discount mortgage allows for interest to be paid upfront, which does not align with the needs of older homeowners looking for deferred payments. Thus, the reverse mortgage stands out as the most appropriate option for this demographic looking to access cash from their home equity.