What type of mortgage allows for monthly payments to be received by an elderly homeowner?

A Reverse Annuity Mortgage specifically addresses the financial needs of elderly homeowners by allowing them to convert a portion of their home equity into cash. In this type of mortgage, the lender makes monthly payments to the homeowner instead of the homeowner making payments to the lender. This reverse flow of payments provides financial support to seniors, which can be particularly beneficial for those on a fixed income or looking to fund retirement expenses.

With this arrangement, the homeowner retains the title of the property and is not required to make monthly mortgage payments; instead, the loan balance grows over time as payments are received, which can ultimately be repaid when the homeowner sells the home or passes away. This unique structure is made to help seniors access the equity in their homes, allowing them to stay in their home while accessing necessary finances.

The other options represent different mortgage types that do not focus on providing cash flow to elderly homeowners. For instance, a Graduated Payment Mortgage involves increasing payments over time, a Wraparound Mortgage allows for a new loan to wrap around an existing mortgage, and a Buydown Mortgage entails reducing the interest rate through an upfront payment. None of these options facilitate monthly payments received by the homeowner.