HOW DO YOU INTEND TO USE YOUR REVERSE MORTGAGE LOAN PROCEEDS?
One of the advantages of a reverse mortgage loan is that borrowers generally have the freedom to use their cash proceeds any way they choose. Eligible homeowners obtain reverse ortgages for many reasons including:
• Repairing or modifying the home to meet the physical needs of getting older
• Supplementing retirement income to meet expenses
• Managing the costs of in-home care
• Paying off an existing mortgage
• Paying bills
• Paying property taxes
• Delaying Social Security
• Providing a source of funds for living expenses in lieu of liquidating financial investments during times of market downturn or disruption
• Establishing a line of credit for use as a financial safety net
• Helping retirement savings last longer
• Purchasing a retirement home
Do you have a plan for making your reverse mortgage loan proceeds last?
Reverse mortgage loans are most successful when borrowers have a plan to ensure the money supports and sustains them for as long as they want to stay in their home. Additional consumer protections were put into place in 2013 to help borrowers preserve more of their home equity during the first year of the loan.
It is never recommended that reverse mortgage borrowers use their loan proceeds to speculate on real estate or securities, or to engage in risky investment schemes. You should be aware that loan originators are not permitted to require or encourage you to purchase other financial products such as an annuity or long term care insurance as a condition for getting a reverse mortgage.