Choosing a Reverse Mortgage Payout that Works for You
A reverse mortgage is a federally insured program designed to help seniors utilize the equity in their homes in exchange for a loan. When considering a reverse mortgage, also known as a home equity conversion mortgage (HECM), it is important to understand the payout options available to you. Depending on your financial goals, you may choose a one-time payout, a monthly stipend for a set period of time or for life, a line of credit or a combination of one or more options. At Reverse Mortgage Alabama, our team works with residents in Pelham, AL understand everything about reverse mortgages, from application to payout options. We believe that when our clients are informed, they can make the best financial decisions for their future. Contact us today with any questions about reverse mortgage and your payout options.
A Lump-Sum Payout. A lump-sum reverse mortgage payout has to be divided into 2 years; 60% year one and the remaining 40% year two. Many of our clients consider this option if they have immediate expenses that need to be paid. Others choose a lump-sum payout because they are not in need of a monthly financial supplement and would simply rather receive all their cash at once. Still others choose to use their funds toward various investment opportunities. A lump sum payout may be the right choice for you. However, it is important to note that instant cash loan payouts usually will only pay a percentage of the home equity value.
Regular Payments. Many clients choose a reverse mortgage payout in the form of regular – usually monthly – payments. These sorts of payments can help supplement a client’s income over time for everyday expenses. They can also help gradually pay off expenses like credit card bills or car payments. A regular payment might also be used for home repairs or to pay for other homeowner’s expenses. Without the monthly expense of a mortgage and the supplemented income from a regular payout, many clients feel more financially secure.
Regular payments can be set for a predetermined number of years, after which the payout will cease but you are still free to remain in their home. Or, you may choose a lifetime regular payment plan, in which your loan stipulates that you will receive payments at a set amount until your passing. The Reverse Mortgage Alabama team can help you evaluate your goals to determine if this is right for you.
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A Line of Credit. A third option for a reverse mortgage payout is a line of credit. A line of credit is available for rainy day expenses, unexpected expenses such as medical bills, or for other reasons. This line of credit is a great option for clients who are not certain they will need to use all the income for their home equity. It may also be combined with a monthly payout option in many cases. After taking a detailed look at your expenses and future expenses, you can choose the best combination of reverse mortgage payout options for you.
We can help you explore reverse mortgage payout options to help you achieve your financial goals. Whether you have immediate expenses or want to feel more security in your daily finances, reverse mortgage offers solutions for you. If you are 62 years or older, own a home and live in Pelham, AL. contact Reverse Mortgage Alabama about your reverse mortgage payout options. We offer honest advice and are here to answer your questions.