Reverse Mortgage Payment Options
Choose The Best Reverse Mortgage Payment Plan Determining Your Requirements
The reverse mortgage plan which you choose will have a great impact on how much money you will be receiving in the long and short run, how quickly you will be using up your home equity and how the reverse mortgages assist you in attaining your financial goals. Here is the list of reverse mortgage plans to choose from.
Fixed Rate Payment Plan:
If you are looking for the fixed rate reverse mortgage, then you have only one option that is lump sum payment plan. Under this plan, you will be receiving a huge amount at once your reverse mortgages close. While the interest rate is higher when compared to adjustable rate plans, the expected rate of interest is lower over time.
Adjustable Rate Payment Plans:
There are five adjustable rate payment plans which have adjustable rates. These adjustable rate payment plans are as follows:
- Tenure Payment Plan:
You can get monthly payments as long as you live in the home. As the monthly payments are calculated assuming that you will live around 100 years, you will definitely receive payment even if you live longer. If you want a monthly plan to receive steady income out of it, then you are sure to get benefit from tenure payment plan.
- Term Payment Plan:
You can get monthly payments for a considerable period of time as per your requirement. Term payment plan is really the best idea if you are clear on how long you will be living in the home. The monthly payout of this plan is higher when compared to tenure payment plan.
- Line Of Credit:
You can get access to the cash whenever you need it. You have the liberty of deciding when to draw the amount and how much to draw until your balance is lower than the principal limit. Your lender doesn’t want you to withdraw minimum amount on the already set schedule.
- Modified Tenure Plan:
You can get monthly payments in combination with the line of credit until the borrower occupies the home as a principal residence. Of course, the payment will be smaller when compared to straight tenure plan.
- Modified Term Plan:
You can get a fixed monthly payment for the predetermined number of months and access to the line of credit as long as the borrower maintains the home as the principal residence.
By reviewing the pros and cons of all these payment plans, you can decide and enroll with the one that best suits your requirements.