Tennessee Real Estate License Exam Practice Question
The purpose of a reverse mortgage is to
Correct Answer: D
Rationale: A reverse mortgage is primarily designed to supplement the mortgagor's income, allowing homeowners, typically seniors, to access their home equity without needing to make monthly mortgage payments. This option is beneficial for those looking to enhance their financial stability in retirement.
Option A is incorrect because a reverse mortgage does not allow the mortgagor to borrow more funds as they pay down an existing mortgage; instead, it converts home equity into cash. Option B is not relevant, as a reverse mortgage does not grant priority to the mortgagee over liens. Option C is misleading, as reverse mortgages are not intended for financing construction projects but for providing income support to homeowners.
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