The best part about a reverse mortgage is that you can receive the money in a variety of loan disbursement options!
Reverse mortgages come with a wide variety of loan disbursement options. Do you want all of your funds up front in one lump sum? Do you only need a portion of your funds up front but want to have access to additional funds down the road? How about receiving a monthly payment and having access to a line of credit? All of these are possible options with a reverse mortgage.
The amount of equity that you can access varies and is determined by the reverse mortgage product you choose, the age(s) of the borrower(s), the appraised market value of your home, HUD lending limits and current interest rates. Generally speaking, the more valuable your home is, the older you are and the lower the interest rate, the more funds you may be eligible to receive (Up to the maximum lending limits set by HUD, Currently $625,500).
Let’s review the loan disbursement options in greater detail:
- Tenure: Equal monthly payments for as long as you live in your home (primary residence)
- Term: Equal monthly payments for a fixed number of years.
- Line of Credit: A line of credit accessible at your discretion
- Modified Tenure: Combination of smaller fixed monthly payments
- Modified Term: Combination of smaller fixed monthly payment for a fixed number of years, with a line of credit accessible at your discretion.
- Lump Sum: Receive all of your cash at closing (limited amount in first 12 months).
Once you receive the money, you can use the funds any way you choose.
Looking for more info? You’re in luck!
Reverse Mortgage 101: Seven Core Questions for Reverse Mortgage Shoppers
For an explanation of Reverse Mortgage 101 click here