Understanding a Reverse Mortgage Line of Credit
San Francisco Examiner, October 22nd, 2009
A HUD reverse mortgage
can provide seniors with a sufficient cash flow during their retirement
years that can enable them to live more comfortably than they often
could otherwise. Options in a new reverse mortgage make it possible to
be able to receive the money in the best way for the senior’s situation
- including a line of credit.
A Reverse Mortgage Line of Credit Is Different
Cash can be obtained from a HUD reverse mortgage, as a lump sum, in
monthly payments, or as a line of credit. These three methods can also
be combined to provide a great way to meet your financial needs. A line
of credit from a reverse mortgage, however, is different from a line of
credit in a regular conventional HELOC.
No Payments Are Made While You Are in the Home
For one thing, the borrower in a reverse mortgage agreement will not
make any payments as long as they are still living in the house. This
gives them access to their money in the line of credit without having
to be concerned about keeping up with any payments.
The Line of Credit Becomes More Valuable
A line of credit in a reverse mortgage also has a growth rate, whereas
a traditional line of credit does not. The growth rate fluctuates
monthly based on a growing amount of equity which occurs as the home
gains in value. The more equity that you have, the more money there is
that becomes available in the line of credit.
Read more of this article.About Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
Professional Financial Advisors: Find out what a financial advisor can do for you at NewRetirement.com.