A reverse mortgage is a mortgage that allows homeowners that are over the age of 62 to cash in some or all of the equity in their home. It allows them to secure these funds to use as they see fit. Many will use the funds for home improvements or for extended term care. Those that need these funds are often able to secure them with little to no trouble. These funds serve as almost free money because, besides the fees that are charged, these mortgages will not likely be paid back during the course of the homeowner’s life. These options are readily available.
There are also several options when it comes to how these loans are paid to the homeowner. You can often choose on of them or a combination of all of them to use for your needs.
A lump sum: Often, the money from a reverse mortgage will be paid to the homeowner in a lump sum, meaning a one time payment of the value of the equity in the home.
A specific amount that is paid over the course of ten years (or other terms are available.) In this option, the homeowner will be able to have payments over the course of the set terms, ten years in this case, that they will receive a check from the equity in their home. This can help homeowner to manage their funds throughout this time period.
A specific amount can be paid each month to the homeowners until they die or they move out of their home permanently. This is often something that allows them to secure a monthly payment to use as they see fit without worry about it running out before they die.
A line of credit is also an option in a reverse mortgage. Here, the funds are provided as a line of credit that can be repaid to the lender. Here, they can take out a specified amount to make a repair or to pay a bill as they need the funds. In some cases, this too is not paid back. It is simply tapped into when it is needed.
Securing the right type of terms for your needs is really up to you. Consider what you need the fund for and how readily you need them. Some will get a lump sum payment for their reverse mortgage and then place the funds into a savings account until it is needed. You can do whatever is right for you as in most cases, there are no restrictions.
Hopefully, this gives you a good understanding about how to get money from a reverse mortgage?!