A Supplemental Income: Uses for Your Reverse Mortgage Loan
A reverse mortgage is a special loan program designed to help seniors at home, mortgage-free in exchange for the equity they have built. Reverse mortgage borrowers also choose to receive a monthly payment, lump sum payout or a line of credit. There are many uses for reverse mortgage payout that can help homeowners with all types of goals. The Reverse Mortgage Alabama team has many years’ experience helping clients in Birmingham, AL, and surrounding areas explore the uses for reverse mortgage funds to determine if this type of loan suits their needs. If you have questions about reverse mortgage, contact our team today for honest answers and advice.
How You Could Use a Reverse Mortgage Loan
Building equity in your home takes a substantial amount of dedication and effort. If you own most or all of the equity in your home, but could benefit from supplemental income, a reverse mortgage may be right for you. Also known as a home equity conversion mortgage (HECM), a reverse mortgage allows you to borrow against your equity, while continuing to live in your home, mortgage-free.
The ways you use your loan are virtually up to you. Many of our clients use their HECM payment to:
- Renovate their homes for increased comfort or accessibility
- Pay off medical debt, credit card debt, and other debt
- Help fund in-home care or other upcoming medical expenses
- Assist with a loved one’s expenses such as college tuition
- Supplement existing social security, pension or other income for monthly expenses
- Make investments in stocks and bonds
- Take a long-awaited vacation
If you continue to live in your home, make your property tax, homeowners insurance and other living expenses, you can use your loan as you please.
Choosing a Payment That Works for You
In addition to helping seniors understand and apply for HECM, we also provide guidance in terms of what type of payout might best meet their goals. There are three main ways to receive your loan:
- A monthly payment
- A lump-sum payout
- A line of credit
In some cases, you may be able to combine a monthly payment with a line of credit, as well. If you are looking for a long-term supplement to your income, a monthly payment may be the best option for you. If you are in need of cash fast, and are willing to take a smaller percentage of your equity value to do so, you may be better suited for lump-sum payout. If you would like to prepare for unexpected expenses or simply have rainy day funds available to you, a line of credit may be your best option.
Planning Carefully for Your Future
Whatever the reason you have chosen to explore reverse mortgage, Reverse Mortgage Alabama can help. We are proud to help the people of Birmingham, AL, explore uses for reverse mortgage funds so that they can achieve their financial goals and live more comfortably. Contact us today for a free consultation and to have any of your questions answered about HECM.