This loan product is typically for borrowers of 62 years old who have built substantial equity or have paid their home in full and wish to cash out the equity in their home?

The correct answer is based on the specific characteristics and target demographic of the loan product in question. A reverse mortgage is designed primarily for seniors aged 62 and older who wish to access the equity built up in their homes without the necessity of making monthly mortgage payments. Instead of making payments to the lender, the loan is repaid when the borrower moves out of the home, sells it, or passes away.

This type of loan allows older homeowners to convert their home equity into cash, which can be used for a variety of purposes, such as medical expenses, living costs, or home improvements. Reverse mortgages are secured by the equity in the home and are particularly beneficial for retirees seeking financial flexibility.

Understanding the context of other loan types strengthens this choice. A Home Equity Line of Credit, for example, is more commonly used by younger borrowers and typically requires monthly payments. Conventional and FHA loans do not specifically cater to the needs of seniors looking to age in place while accessing equity. Thus, the unique features of the reverse mortgage make it the appropriate loan product for the scenario described.