Now that you’ve determined you qualify for a reverse mortgage and it is right for you or your loved ones, how do you use it? Today I discuss in the video above and in this blog three ways you can utilize a reverse mortgage.
Lump Sum: One way that seems to be popular is with a lump sum. This simply means that whatever your qualifying portion of your equity is, you can draw it in a lump sum. You cannot take a portion of your lump sum or simply choose a number that would work for you. It’s all or nothing. Now there is a guideline that states that you only have access to sixty percent of the eligible amount within the first 12 months. After the first 12 months you will have to draw the remaining portion of it. This is just an added safety net if you will to keep you from somehow burning through all of your equity.
Equity Line: You can essentially set up an equity line with a reverse mortgage just as you would if you walked into your bank. The only difference is you don’t need to use your credit, income and various other details to get qualified for a reverse mortgage equity line. And you still do not have to make any monthly payments. Going through your bank with a traditional equity line is definitely an option. But it would require full qualification and making monthly payments.
Fixed Payments: You can also set up a fixed monthly payment draw. This option would be best suited for someone who simply needs to supplement their retirement income. Say you needed an extra $1,000-$1,500 per month to make up for total monthly expenses. Then this would be the ideal option.
There is no right or wrong way of using a reverse mortgage really. Everyone is different and it just depends on the scenario and the age of the borrower really and what they are looking to accomplish. If you’d like to learn more about a reverse mortgage and how it may work for you, contact me today.
Green House Mortgage is a full service home loan origination company in Tampa, FL and servicing the state throughout. If you have any questions or concerns with the article or simply need mortgage advice please call 813-732-3155 or email us at email@example.com. We are dedicated to giving you the best mortgage consultation available. Green House Mortgage – It Pays to Go Green!