Reverse Mortgage Info Disbursement Options

Reverse Mortgage Info: Payment/Disbursement Options

There are a number of different ways a borrower can receive money from a reverse mortgage. These options are referred to as “disbursement options”, and they include: a lump sum, a line of credit, a monthly payment, or a combination of options. Your mortgage banker will go over these disbursement options as well as other reverse mortgage info with you prior to closing.

Contact one of the reverse mortgage specialists at Citizens Lending Group today at (800) 480-6828 to learn more about these options and for more reverse mortgage info, or use our reverse mortgage calculator online to learn more about how much you qualify for.

Reverse Mortgage Payment Options: Choosing What’s Best

Lump Sum Payment

A lump sum disbursement is a single payment received by the borrower at the time of closing. Rather than receive payments over time, the borrower receives payment all at once. A borrower can receive up to 60% of the principal in the first year of the loan.

A lump sum disbursement is perfect for seniors looking to consolidate higher interest debt, take that vacation of a lifetime you have been dreaming of, or start the business that you have always wanted to. Borrowers should discuss the lump sum option and other reverse mortgage info with their agent prior to closing to determine if this option is right for you.


Line of Credit

Another option for reverse mortgage disbursement is that a reverse mortgage can take the form of a line of credit. The line of credit remains open during the life of the loan, allowing the borrower to withdraw cash if and when it is needed. The line of credit cannot be reduced or cancelled, but may be closed when it is fully paid off.

A line of credit provides the flexibility of a home equity line of credit without the monthly obligations.


Monthly Payment

Borrowers may elect to receive their reverse mortgage payment in monthly installments. Usually, these are fixed monthly payments that continue over the life of the loan. The value of the payments are determined by taking into account the borrower’s age, the home’s value, and the prevailing interest rates.

This is a great choice for seniors who want the reliable payments from something like an annuity without the expense associated with it. With the monthly payment option, reverse mortgages can provide money to cover things like monthly living expenses or medical bills. Borrowers considering this option should discuss the monthly payment option and other reverse mortgage info with their agent prior to closing to determine if this is the best solution for their financial needs.


Combination Payment

In addition to the basic disbursement options above, custom reverse mortgages are available to fit borrowers’ needs. For example, borrowers may elect a partial lump sum and a monthly payment, or a monthly payment with a line of credit. Your agent can discuss these combination options and other reverse mortgage info with you to help structure your reverse mortgage in a way that will best meet your financial goals.


Learn More About Reverse Mortgage Info & Disbursement Options

If you need help weighing the pros and cons of the different disbursement options, a friendly representative from Citizens Lending Group is here to provide you with more reverse mortgage info. Call us at (800) 480-6828 or use our online contact form to learn more about reverse mortgage requirements and if a reverse mortgage is right for you!

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These materials are not from HUD or FHA and were not approved by HUD or a government agency.