Common Uses
The proceeds from a reverse mortgage can provide funds for many
purposes: monthly living expenses, home repairs and improvements,
medical bills and prescription drugs, paying off existing debts,
education, travel, long term health care, along with many other
uses. If your home needs repairs to meet minimum property standards,
a portion of the proceeds will be set-aside from the available funds
for this purpose.
Borrowers can choose how they would like to receive the loan proceeds.
- Lump sum (all at once)
- Fixed monthly payments
- A line of credit
- Or any combination of the above
The funds provided by way of a reverse mortgage are considered as
loan proceeds, and as such are not taxed as income. These funds,
however, may affect your eligibility for certain kinds of government
assistance, so an applicant should consult with their program adviser
before applying for a reverse mortgage.
The amount of funds received will depend on three factors, such
as, the age of the youngest borrower, the value of the home, and
the current interest rate. Generally, the older a borrower is, and
the more valuable the home is, the greater the proceeds from the
reverse mortgage will be.
|
