What is typically the primary purpose of a reverse mortgage?

The primary purpose of a reverse mortgage is to provide cash flow while allowing the homeowner to retain ownership of their property. This financial product is designed primarily for older homeowners who have accumulated equity in their homes but may not have sufficient income to cover their living expenses.

With a reverse mortgage, the homeowner can convert part of the equity in their home into cash without having to sell the property. This cash can be utilized for various purposes, such as paying for healthcare, covering daily living expenses, or fulfilling other financial needs. Throughout the life of the loan, the homeowner maintains the title of the house and does not have to make monthly mortgage payments; instead, the loan is repaid when the homeowner sells the home, moves out, or passes away.

In contrast, the other choices focus on different objectives that are not aligned with the primary function of a reverse mortgage. Refinancing existing debts typically involves taking a new loan to pay off existing debts, which does not represent the cash flow aspect of a reverse mortgage. Enhancing real estate investments suggests active investment strategies, rather than the financial assistance and cash flow provision intended with a reverse mortgage. Purchasing a second home is also a different financial transaction that is not related to how a reverse mortgage functions. Overall, the