How to Handle Money from Your Reverse Mortage
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When you get a reverse mortgage you get something wonderful: cash. The question is how can you best prepare for and handle this sudden cash flow? Here are some tips;

First, determine the amount of money you are eligible to receive. Your lender and your counselor should both be able to help you with determining the amount you are eligible for. A number of factors will influence this amount, including the location and value of your home, your age and where you live, as well as the interest rate and kind of reverse mortgage that you select.

Next, you will have to decide how you want to receive the cash from your reverse mortgage. You actually have a number of choices. Reverse mortgages offer you many different payment options. The trick is to decide which one best fits your current – and future needs.

You can decide that you want to receive your money all at once, in one lump sum. This option may be your best bet if you plan to invest the money or use it for a large expenditure, such as to pay off a large existing debt or a major remodeling project.

You can also choose to receive monthly payments for the duration during which you continue to live and reside in your home. This is generally the best option if you intend to use the money to supplement your current income or help with your monthly bills. You can also decide to receive a larger fixed amount for a set period of time. This might be a good choice is you knew that your financial situation was going to improve at a certain time in the future or you were planning to sell your home, pay off the reverse mortgage and move somewhere else in a certain number of years.

You also can opt for a line of credit. This applies in all states except Texas, where these are not permitted due to state law. A line of credit gives you the flexibility to take money when you want in any amount that you choose until you have used up your line of credit. This is actually the most popular choice with seniors who choose a reverse mortgage.

Speaking of flexibility, you can also decide to combine a line of credit with monthly payments for as long as you remain living in your home. This gives you both the security of a stable income with the flexibility of cash on command. There are also other combinations of payments that you can choose. Once you decide what would work best for you, talk with your lender and counselor about the options you have.
Remember that the money you get from your reverse mortgage is your money to spend in any way that you want. It can be helpful to decide what use you want to put your money to before you decide how you want to receive it. The decisions are all yours.

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