HOW DO YOU INTEND TO USE YOUR REVERSE MORTGAGE LOAN PROCEEDS?
One of the benefits of a reverse mortgage loan is that borrowers are generally allowed to spend their cash proceeds any way they see fit. Reverse mortgages are obtained by eligible homeowners for a variety of 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 work best when the people who take them out have a plan to make sure they have enough money to live on for as long as they want to stay in their home. Since 2013, more consumer protections are in place to help borrowers keep more of their home equity during the first year of the loan.
Borrowers of reverse mortgages should never utilize their loan profits to speculate on real estate or securities, or to engage in dangerous investment schemes. It is essential to be aware that loan originators do not have to demand or encourage you to acquire other financial products as a condition of obtaining a reverse mortgage, such as an annuity or long-term care insurance.