Ways To Receive Funds With A Reverse Mortgage

Reverse MortgageIt is well known that people take out reverse mortgages on their homes to receive money. They are a helpful tool for those aged 62 years or older and need funds to live their lives to the fullest. However, not many people know that you can receive this money in several different ways. Everyone has unique needs, so it is helpful to understand the various ways you can get these funds. In today’s blog, Family Home Loan Texas goes through the options you have to receive the proceeds and the nuances attached to each.

Reverse Mortgage Refresher

There is a lot of misinformation out there regarding these types of loans, so it is important to establish the facts about them. As mentioned above, they are for individuals who are 62 years old or above. You can only take out a reverse mortgage on your primary residence, and it typically makes sense to do so only if you have close to 50% equity in it or more (though everyone’s financial situations are different, so this changes from person to person). For this type of loan, you receive payments from a lender and only have to pay it back once you move out of the home or you default on it. Typically, this only happens if it ceases being your primary residence, or you stop paying taxes, insurance, or other upkeep expenses. While you do have to pay interest on the money you receive, you do not do so until you move out.

How You Can Receive Your Funds

Now that we have the basics out of the way, let’s discuss the different ways you can get your money. You can receive all the funds as a lump sum — meaning you get it all at once at the very beginning of your loan. With this option, you will pay a fixed interest rate, meaning that the interest stays the same throughout the duration of the loan unless you refinance it down the road. 

You can also get the money in monthly payments for the duration of the time you live in the house, which is subject to adjustable interest rates. This means that interest changes either annually or semi-annually. 

A line of credit is another option, which means that the money is available when you need it. The benefit of this option is that you only pay interest when you take the money. Like monthly payments, this option comes with an adjustable interest rate. Finally, you can opt for a combination of a line of credit and monthly payments. Overall, you should choose the one that best fits your needs. When you begin the process, an independent professional will make sure you fully understand how you can get your money.

Call Us To Learn More About How You Can Access Funds

We are here to help with all of your reverse mortgage needs. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about the ways you can receive your money when you have a reverse mortgage.