Finance
A Minnesota homeowner has a reverse mortgage. Which statement about this loan type is correct?
AMonthly payments are required to maintain the loan
BThe loan balance increases over time as interest accrues✓ Correct
CThe homeowner must be at least 55 years old
DThe loan must be repaid within 10 years
Explanation
With a reverse mortgage (Home Equity Conversion Mortgage - HECM), no monthly payments are required. Instead, the loan balance increases over time as interest accrues. The loan becomes due when the homeowner sells, moves out, or dies. The borrower must be at least 62 (not 55) to qualify. Minnesota seniors use reverse mortgages to supplement retirement income.
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