A reverse mortgage allows a senior to tap into the equity of their home in order to help fund retirement. The best part is, no payment is due until the borrower passes away. At that time, the value of the home is used to pay off the existing balance of the home with the remainder going to the heirs.
Two of the main questions that people who are curious about reverse mortgages ask is what are my fund distribution options and how can I use the funds?
Regarding fund distribution, there are several options. You can get monthly distributions, you can opt for a lump sum, you can choose a line of credit, or you can come up with a hybrid of these options.
In terms of how you can use the funds, contrary to popular belief, you can use the funds from your reverse mortgage however you would like. You can use the funds to take a vacation, pay off an old debt, help your grandchildren or children, or even remodel your home. After all, it is your money, so you can spend it how you’d like.
Of course, you should take the time to get sufficiently educated when you are thinking about getting a reverse mortgage. This is a big decision and it impacts your retirement. Make sure that you are fully educated before making any final decisions. One of the best ways to make sure you have all the information you need is to consult a Reverse Mortgage Specialist like those at FirstBank. They will answer all your questions, ask you questions you might not have thought of, and help you determine if a reverse mortgage is truly in your best interest.