Common Uses

Ways you can use a reverse mortgage

Older homeowners often find they can live more comfortably with a reverse mortgage loan. With the reverse mortgage’s flexible repayment feature, you can use the funds however you choose and gain more freedom in managing your monthly expenses:

Gain flexibility

Improve monthly cash flow
Have a standby line of credit whenever you need it

Reduce your bills

Eliminate mandatory monthly mortgage payments
Consolidate auto loans and high-interest credit card debt

Fund major expenses

Buy a new car or home that better suits you
Pay for home health care

As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and maintenance.

Already have a reverse mortgage?

Keep in mind that you can also refinance an existing reverse mortgage. With interest rates at near-record lows, this is an important consideration. Refinancing a reverse mortgage is similar to refinancing a conventional mortgage — you’re looking for a financial benefit, which might include more favorable terms or a monthly payout that better fits your needs.

CHOOSE HOW YOU TAKE YOUR FUNDS

Which works best for you? Loan proceeds can be taken as:

A lump sum^†

Fixed monthly advances

A line of credit

Or a combination of these

Best of all, you can change how you receive your remaining funds at any time to suit your lifestyle needs.

^†With a HECM loan, commonly known as a reverse mortgage, no principal and interest payments are required until you move, pass away or sell the home, as long as you meet your loan obligations. (As with any home-secured loan, you must keep current with property-related taxes, insurance and maintenance for the loan to remain in good standing.) However, you can opt to pay down your principal and interest if and when you choose; no pre-payment penalties apply.