Receiving Your Reverse Mortgage Money, Part II ................................................................................................................................................................................................. One of the main reasons that a lot of people like reverse mortgages is that there is a lot of versatility to them. Not only is there versatility in how you can pay back the reverse mortgage loan, but there is also versatility in how you can choose to receive the payments from the reverse mortgage lender you are dealing with. In the first part of this section, two potential payment options were discussed. The first of those options dealt with receiving a lump sum payment and the second one dealt with receiving equal monthly payments for life. Those are both excellent options, but there are four others available to people from most reverse mortgage lenders. Two more of those options are discussed below.
Option #3 – Monthly Payments for X Months
Option #3 is somewhat similar to option #2 (discussed in another article), but the main difference between the two has to do with the time period. Both options involve monthly payments, but the difference with option #3 lies in the fact that you actually determine beforehand the number of months you want to divide your payment over. In other words, X is whatever amount you decide it is so if you have a reverse mortgage loan amount worth $120,000 and you decide you want to spread it out over 10 years (120 months), then you would receive a monthly payment of $1000.
The main advantage to option #3 is that it allows you to indirectly determine your monthly amount. With option #2, the amount needs to be kept small in order to insure that you will continue to receive payments until you either move from your residence, or pass away. Option #3 allows you to set the specific time period and therefore determine how much of the reverse mortgage lump sum amount you will be paid each month. This allows you to keep your liquid assets low, while still having some say in how much you get each month.
Option #4 – The Line of Credit
The line of credit is the option that is the most popular one when it comes to people taking reverse mortgages. The line of credit is in fact the option used by the majority of people that take reverse mortgages and this is primarily because of the flexibility afforded to someone that decides to go with a line of credit.
The way a line of credit works is pretty simple. The money is kept and administered by the reverse mortgage lender so that you don’t have to worry about it being included with your other liquid assets. Whenever you want, you can take funds from this line of credit. There is nothing that tells you exactly when you can and can not take funds from the line of credit aside from the business hours of the reverse mortgage lender you are dealing with and the amount available for use. The flexibility combined with the easy accessibility is primarily why so many people enjoy this option.
