Reverse Mortgage Payments

There are several options for receiving the proceeds from a reverse mortgage. Even if you choose one method of payment now, there is usually flexibility to change it later.

Lump Sum Payment

This is the only option that can’t be changed down the road; you get all of your proceeds at once when you close on your reverse mortgage.

Tenure Payments

With the tenure option, you receive monthly payments for as long as you live in the home. Tenure payments continue even if the amount you receive from a reverse loan is more than the value of your home.

Term Payments

You also have the option of receiving fixed monthly payments for a specific period of time, for example five or ten years. This is useful if you want funds for a limited time. For example, you plan on moving in 5 years, so you opt for 5 years of payments.

Get a Line of Credit

If you aren’t sure when you might need the money, you can choose a line of credit. This allows you to get cash from a reverse home mortgage when you need it. The unused portion of the credit line can continue to grow if the value of your home rises. It could also increase based upon your age.

Get a Combination of Reverse Loan Payments

You can also receive monthly reverse mortgage payments plus a line of credit. The fixed monthly payments may be received for as long as you live in the home or for a specific period of time. You also would have a credit line set up that can be used as needed.

If you aren’t sure of the best way to receive reverse mortgage proceeds, talk with a qualified reverse mortgage counselor. A counselor can discuss reverse mortgage guidelines and help you decide if getting a loan suits your financial situation.

This entry was posted on Tuesday, June 1st, 2010 at 6:23 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.