Tennessee Real Estate Exam Practice Question
The purpose of a reverse mortgage is to
Correct Answer: D
Rationale: A reverse mortgage is designed to supplement the income of the mortgagor, typically senior homeowners, by allowing them to access their home equity without monthly repayments.
Option A is incorrect because a reverse mortgage does not involve borrowing more funds as payments are made; instead, it converts equity into cash. Option B is misleading, as reverse mortgages do not grant priority over liens but rather prioritize the lender's claim on the home’s value. Option C is also incorrect, as reverse mortgages are not intended for construction financing; they focus on providing income support to homeowners.
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