Reverse mortgages can help you pay off your debts, find a way to supplement your income, or just make ends meet when things take a financial turn for the worst. However, a few handy tips can keep you from spending more than you have to. If that sounds good to you, then we’ve got you covered. Here are some tips:
Choose your payout method wisely
You can receive the proceeds from the loan in a number of ways: as a lump sum, a line of credit, a monthly payment or go for the term option that allows you to get monthly payments for only a given number of years. You get to pick how many years. You can also go for a combination of these payment options, depending on what you need.
Stay away from lump sum options
Reverse mortgages are often thought of as a last-resort option, and for a reason: if you go for the lump sum option—which is what many loan applicants want to go for to fund home repairs or long term care expenses—you won’t be able to make the most out of your loan. Consumer Finance states that you’ll only be able to borrow the amount stated under the first-year withdrawal limits.
Go for adjustable rate loans
If you must go for a lump sum payout, then go for one that comes with an adjustable rate. That way, you won’t have to forfeit any amount that remains after your loan bumps against the restrictions of first-year withdrawal limits.
Take it out only when you need it
A line of credit can be a good choice if you want to save up on interest charges. By taking it out only when you need it, you can pay for lower interest fees.
So make sure you remember these tips. Use them for better cost-savings when it’s time to take out a reverse loan. Longbridge Financial, LLC can help you choose the best reverse mortgage options for your current situation. Contact them today!