Using Your Reverse Mortgage

Reverse mortgages are loans on the equity you have in your home. They are only available to people who are age 62 or older, and do not have to be paid back until the owner ceases to live in the home. This makes them great for senior citizens who need extra money but can’t afford an extra monthly payment.

The funds received from a reverse mortgage can be used in any way the recipient would like. They can be paid as a lump sum, monthly payments, or a line of credit. There are many reasons that a senior might want to get a reverse mortgage.

• Home repairs or remodeling – If you have been in your house for an extended period of time, it may need some work. Certain disabilities may necessitate ramps or other modifications. Or you might just want a new kitchen. In any case, a reverse mortgage can help. In this case you would likely want to get the money in a lump sum or line of credit.

• Consolidation of debt – Credit card debt and debt from other loans can be paid off using a lump sum reverse mortgage. This eliminates monthly payments on the debt and frees up money for everyday expenses.

• Health Care Costs – Even if you are getting Medicare, the cost of health care can be overwhelming. The new prescription benefits provide some relief, but some seniors are on numerous medications and still have to pay a large percentage of their limited income toward them. Long term care insurance is another health-related cost that seniors often face. A monthly payment reverse mortgage could be used to alleviate these burdens.

• Property Taxes – If you own a large home or a large amount of land, property taxes can be burdensome. It doesn’t help matters when they are raised, which happens all too often. A reverse mortgage can help you pay your property taxes without having to cut corners elsewhere or borrow money from other sources.

• A New Car – Are you stuck in an old clunker that you’ve been driving for the last 10 years? Repair costs on a car that has seen its better days can add up to be as much as, or even more than, the cost of payments on a new car. But seniors often do not have the means to make a down payment on a new vehicle or the income to make monthly payments. A reverse mortgage can help you get the new car you need without a monthly payment.

• A Vacation – Just because you’re retired doesn’t mean you don’t need a vacation every now and then. The retirement years are one of the best times to get out and do the things you’ve always wanted to do but never had the time. A reverse mortgage can give you the money you need to get away from it all for a while.

These are just a few examples of how you can use the money from a reverse mortgage.