The 4 Benefits of Receiving
Reverse Mortgage Funds as a Line of Credit
There is more than one way to access your home’s equity using a reverse mortgage in Temecula, California. As long as you and your spouse are over the age of 62 and own your home without a mortgage, you can access your equity, using it to enjoy your retirement.
Most people know they can receive their equity as one lump sum, but another popular way is as a line of credit.
Here are the top benefits of a reverse mortgage line of credit.
You Control How Much You Take Out
The lender determines the size of your line of credit, but you decide how much money you’ll access at one time. You can take a little, a lot, or none of it at the closing – the choice is yours. This flexibility gives homeowners more options. Some people just like knowing they have the money available should they need it, while others have plans for the equity they earned in Temecula, CA.
You Don’t Pay Interest on Un-Borrowed Funds
The money sitting in your line of credit doesn’t accrue interest. It’s accessible to you if you need it, but until you withdraw it, you don’t pay interest on it. No reverse mortgage borrower has to pay interest while they still live in the home, but when they or their beneficiaries pay the loan off, they’ll pay interest only on the funds withdrawn.
Your Lender Can’t Freeze Your Reverse Mortgage LOC
Unlike a traditional line of credit on a forward-paying loan, lenders can’t freeze your line of credit on a reverse mortgage. Even if your home value decreases, the lender can’t freeze your line of credit. This means you’ll have access to the full amount offered no matter what home values do.
Your Line of Credit Balance Will Grow
Your unused line of credit balance grows at the same rate of the interest the outstanding balance accrues plus the mortgage insurance premium percentage. While this isn’t interest earned, it increases the balance of your line of credit monthly.
For example, if your interest rate is 4% and your MIP renewal rate is 0.5%, your line of credit balance would grow 0.375% per month (4.5/12). This pertains only to the unused portion of the funds. As you withdraw funds from the line of credit, the amount it grows decreases too.
If you’re wondering how to receive your reverse mortgage proceeds, consider the line of credit. It’s a great way to have the funds handy without actively withdrawing the funds from your home if you don’t need them.
Ready to learn more about the reverse mortgage and how it can help you during retirement? Grab your copy of my free book by visiting www.reversemorgagelive.com. This is a limited-time offer, so act fast to get access to your number one resource to the reverse mortgage.
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