You can choose to take your funds as a lump sum, line of credit, monthly installments, or a combination of these. Reverse mortgage loan proceeds can be used in a variety of ways, such as:
• As an alternative to a Home Equity Line of Credit (HELOC)
• Supplement your retirement income to help preserve your savings
• Pay off your existing mortgage to free up more cash each month
• Generate funds to help cover everyday (or unplanned) expenses
• Cover health care costs
• Make home renovations or upgrades
• Fund a major purchase, such as a new home or vehicle
This option is growing in popularity among retirement-age homeowners, because it offers certain advantages as compared to a traditional Home Equity Line of Credit (HELOC).
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Borrower reatains home ownership* |
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* Borrower is responsible for property taxes, homeowners insurance, and property maintenance. A reverse mortgage is a home-secured debt payable upon default or a maturity event.
** With a Reverse Mortgage Line of Credit, the amount available to the borrower can increase over time. The growth applies to the unused funds remaining in the borrower’s credit line. The less the borrower takes out up front, the more will be available later.
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