Using A Reverse Mortgage Line Of Credit

The savings you build up over time help you with key milestones in your life. From practical matters like home ownership to helping pay for a child’s education to more fun plans like a dream vacation, your accumulated funds help you in many ways. As you near retirement age, you can look forward to one significant reward of saving wisely‚ÄĒretirement! The end of your working life can be something to look forward to, but it can also be harder to prepare for even if you have worked diligently to set up a nest egg.

By taking a reverse mortgage as a line of credit, you can set aside money and watch that line grow consistently until you need it. The credit line will continue to grow at a set rate. FHL Texas can help you understand how to use this to your advantage. You can have more money available to you in the future when you no longer take a paycheck, and you can secure favorable terms if you suspect your home’s value might drop in the future.

You Can Receive Funds From Your Reverse Mortgage In Different Ways

What you receive from your reverse mortgage is influenced by different factors. Your home’s value will certainly affect the sum available to you, and so will any remaining money owed on your original mortgage. You can also make decisions about how the money will be received, as well as whether to use a Property Charge Set Aside to make sure remaining home costs are covered automatically. Another decision to make concerns whether to take a lump sum, set up consistent payments, or establish a line of credit. For people who look into a reverse mortgage and do not have an immediate need for the funds, a line of credit can provide exciting benefits.

How Does Taking Your Loan As A Line Of Credit Benefit You?

A line of credit extended by a financial institution gives you a source of money to draw from. Based on the terms associated with it, the line can actually grow over time and steadily give you access to more funds. A reverse mortgage is not your only option if you want to establish a credit line as a homeowner, as you also have the option of a home equity line of credit (HELOC). With that said, there are certain advantages to a reverse mortgage that make it more appealing. One is that you can enjoy a fixed growth rate. In other words, once you set the terms of your interest, that rate will continue to be applied to your credit line. Another is that you will be able to put an end to mortgage payments that you still have to make while establishing this line.

Establishing Your Line Of Credit Before You Need To Draw Money From Your Home

The option to take out money as a line of credit can be particularly helpful to those who do not need access to funds just yet. If your retirement is still a few years away, you can sit on what you have received and let it grow. By the time you do find that you need to take from it, you can have more funds to access. Because the terms are fixed and growth is guaranteed, you are protected against drops in interest rates or home prices. A sense of certainty can make the challenges of preparing for retirement easier and less stressful. With the stability of your reverse mortgage line of credit, you have money that you can count on ready to use when you need it!

We Can Help You Determine If Now Is The Right Time To Take On A Reverse Mortgage

Because you can benefit from having your reverse mortgage completed before you actually need the funds, you can look into it at an earlier date. Of course, it is not always easy to verify that this is truly the ideal time to take advantage of your property’s existing equity. Housing prices and trends regarding interest can affect what terms you receive. The money owed on your house will also be something to consider. In some circumstances, falling prices and rising interest rates could jeopardize your ability to receive your loan!

While you may not plan on using your line of credit any time soon, you still need to make sure you are eligible for a reverse mortgage at the time you apply. One issue concerns age, as you need to be at least 62 to qualify for either the HECM or Equity Elite loan options. You should also think about the impact of your current mortgage, if you still owe on it, as it will affect how much you ultimately receive. Because your loan terms will require you to stay in the property as your primary residence for the long term, it is important that your retirement plans see you staying in place.

Protection Offered To Recipients Of Reverse Mortgages

Just as you have guaranteed growth from your reverse mortgage line of credit, there are protections applied to the different types of reverse mortgages that are important. One is that the deed to your home stays with you, so you will not have to worry about losing access to the property as long as you live there. Because you are only borrowing against part of your equity, you can have an easier time ending the loan if you need to change your long term plans.

Talk To FHL Texas About Taking A Reverse Mortgage Line Of Credit

You can exercise more control over your reverse mortgage than you realize. There are different types of loans available, and there are different methods for dispersing what you receive. For those who want to make their reverse mortgage work for them over the long term, receiving it as a line of credit can lead to key advantages. Whether you want to draw from the equity of your home to make retirement easier, protect yourself against unexpected costs, or simply to have more financial freedom to have fun, FHL Texas can help you understand how to make the most of a reverse mortgage! If you have questions or wish to start discussing your options, please call FHL Texas today at 1-800-990-LEND (5363).