So you’ve decided to get a reverse mortgage but aren’t sure how you should take your cash. A big question many people have is whether it makes sense to take one big withdrawal or stretch out the payments. Let’s look at your options for getting paid.

Big Chunk of Money
A lump-sum payout would allow you to get all of your money right away. This could be good if you are responsible with large sums of money. It could also be useful if you plan to downsize to a smaller home and don’t want monthly mortgage payments. However, if you aren’t very good at handling large amounts of money, you may want to choose a different payment option.

Line of Credit
Having a line of credit would allow you to withdraw money from your reverse mortgage loan whenever you needed it. Withdrawals are on your schedule in whatever amount needed until the line of credit has been used up. A line of credit may work well for you if you only need a small amount of cash to supplement your income right now but anticipate needing more money down the road.

Fixed Monthly Payments
You could receive the money as equal monthly payments. It would be paid for a specific amount of time or for as long as at least one borrower continues to live in the house as the principal residence.

Reverse mortgage loans also allow you to combine the previous options to receive payments. For instance, you could get a lump sum payment at the beginning of your reverse mortgage, then withdraw additional money through a line of credit.

Think about your personal money habits, the amount of income you currently have available, and your plans for using the money from a reverse mortgage to decide which payment plan is right. A reverse mortgage counselor should be able to help you set some goals and decide upon the best way to get your money.

This entry was posted on Thursday, June 11th, 2009 at 7:56 pm and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.