Getting a reverse
mortgage can be an excellent opportunity for senior citizens to have
a supplemental income, but you should know that there are many
conditions you should meet before you are approved for one. When you
do get qualified, however, the next question you might be asking is
which payout method you should prefer. Here are some comparisons
among three options:
Lump Sum
The main advantage of
taking a lump sum is that you get all you are entitled to in one
sitting; no more waiting for monthly payouts and keeping it stashed
away for a rainy day. However, this fact in itself presents a
problem; if you happen to spend it all in one place, you’ll have
nothing left.
Tenure
The tenure option
allows you to receive regular monthly payments for as long as you
(the borrower) use your mortgage home as your primary residence. On
the other hand, expect your tenure payouts to have low value, because
there really isn’t a set termination date for the loan, which will
be based on your age and home value.
Line of Credit
Another option that’s
great for when you don’t know exactly when you’ll need to take
out an amount from your loan is line of credit. Essentially, this
allows you to access your funds anytime you want, with the added
benefit that your account will never be frozen, canceled, or reduced.
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