What type of loan allows a property owner to access the equity in their home without making monthly payments?

A reverse mortgage is specifically designed to allow property owners, typically seniors, to tap into the equity of their homes while foregoing monthly mortgage payments. Instead of the homeowner making payments to the lender, the lender makes payments to the homeowner, thus converting the home equity into cash. This is particularly beneficial for those who may have limited income but significant equity built up in their property. The loan is repaid when the homeowner sells the house, moves out, or passes away, making it an attractive option for those looking to supplement their retirement income without the immediate burden of repayment.

In contrast, a contract for deed involves an agreement where the buyer makes payments to the seller, but the seller retains ownership until the contract is fulfilled. A purchase money mortgage is a type of financing used to buy a property, requiring monthly payments similar to a traditional mortgage. A growth equity mortgage allows for a change in the payment amount over time but still requires regular payments from the homeowner. Therefore, among the options provided, only a reverse mortgage fits the criteria of accessing home equity without monthly payments.