What payment options are available with a reverse mortgage? Is there a choice? Who decides how you get paid? Find out what your options are.
If you are taking out a reverse mortgage loan and are worried about which option to choose, here is some information about the options available to help you choose the best one for you.
Option number one:
With this option you can receive the money in one lump sum in a check or sent to your bank. A reverse mortgage is handled differently than other types of home loans. This option would be appropriate for someone who is looking to make a large purchase like a car or a boat, something you have always wanted but could not afford. Or take a long overdue vacation.
You have another choice with this option as well. You can choose to have the lump sum payments spread out into equal monthly payments, like a second income. You would never have to worry about covering your expenses and have a little added peace of mind.
Option number two:
This option allows you to use the money like a line of credit. The amount is held in an account for you to be used whenever you need it. You could keep the money there and use it for monthly expenses or unexpected emergencies that might come up. Car repairs and leaky pipes are things that happen out of the blue. It is nice to have a little cushion built up for times like these.
The third option available is a combination of the other two:
This option allows you to designate some of the money to be paid in a lump sum and the other part to be put into a line of available credit. This is also a good option. If there are some bills that you need to catch up on this is a good way to do it. Use the lump sum to pay off old bills and the credit line for expenses and small purchases.
You control how you want to be paid with your reverse mortgage. Choose the option that works best for you. Your mortgage broker can explain the options in better detail and help you decide.
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