If you want to supplement your income during retirement, you may be able to tap into your home equity with a reverse mortgage. One of the advantages of reverse mortgages is that you can receive the funds from the reverse mortgage in three different ways: as a lump sum, in monthly installments, or as a line of credit. In this post, we are going to explain each of these options to you and discuss how you can choose the one that is suitable for your needs.
Options for Reverse Mortgage
- Lump sum. One way you can receive the money from a reverse mortgage is all at once through a lump sum. This option may be worth considering if you need all the money right now in order to make some kind of a large payment. As you might guess, a lump sum does have some drawbacks. You may pay more in interest for a lump sum, and you may qualify for less in total than you would if you chose a different option for disbursement.
- Monthly payouts. Another option for receiving your reverse mortgage disbursements is in the form of monthly installments. If you do not need the entire amount right now, you might want to think about this option instead. Receiving the money over time can be helpful if you would otherwise be tempted to spend it all at once. Plus, you will only end up paying interest on what you actually receive, and you will likely qualify for more than you would with a lump sum.
- Line of credit. One more option for how you can receive reverse mortgage money is in the form of a line of credit that you can use on an as-needed basis.This is another option that is ideal for keeping your interest to a minimum, as you will only have to pay interest on what you actually use. You will be able to use as much or as little of the available line of credit as you need at any given time, maximizing flexibility.
Learn More About Reverse Mortgages or Apply Now
During your consultation, you will be able to ask us your questions about reverse mortgages. When you share the details of your scenario with us, we also will be able to give you personalized advice regarding which disbursement method may be ideal for you. If you are ready to get the supplement to your income that you need to make the most of your retirement, please call us at (248) 788-0800 to schedule your consultation. We work with senior homeowners in Michigan and 15 other states.