Reverse Mortgage Money Can be Distributed Several Ways

8/03/2009

posted by N. Sioris

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Reverse Mortgage borrowers are offered several choices of how to take the cash distributions from a HECM (Home Equity Conversion Mortgage) reverse mortgage loan. Each borrower is able to make this decision for themselves, unless the entire reverse mortgage home loan amount is required to payoff an existing "forward" mortgage balance on their home.

For this discussion, let's assume that most or all of the reverse mortgage loan proceeds will NOT be needed to payoff a current mortgage debt. In this case, the borrower has five options for how to receive the money from the reverse mortgage home loan.

• Tenure - Equal monthly payments as long as at least one borrower continues to live in the home as a primary residence.
  
• Term - Equal monthly payments for a fixed period of months that the borrower selects.
  
  
• Line of Credit - Unscheduled payments or installments, at times and in amount of the borrowers choosing, until the line of credit is depleted.
  
• Modified Term - Combination of the line of credit option plus monthly payments for a fixed period of months, selected by the borrower.
  
• Modified Tenure - Combination of a line of credit with monthly payments for as long as the borrower remains living in the home.

Understanding these options and then making a selection that will be the right choice, is sometimes confusing and a bit intimidating for some borrowers. However, one of the GREAT things about the government insured reverse mortgage is that at anytime during the course of the loan, a borrower can call the loan servicer and request a change to the way he/she receives the reverse mortgage home loan benefits.

The borrower is not locked in forever. So when "life happens" and circumstances change, this type of loan comes with the flexibility of easily making a change to the way equity is paid out.

Request a complimentary reverse mortgage loan quote today. It will be customized to suit your individual specifications.