- Proceeds from a Reverse Mortgage

The proceeds from a Reverse Mortgage can be used for many things. Determining the amount of money you get from the loan is based on five criteria’s, as follows:

1. The value of the home is determined by the appraisal, which includes any repairs, health or safety issues, as well as any liens that may be on the home. This will all be evaluated through the appraisal process.

2. The age of the senior is also VERY important. In the United States you must be sixty-two years or older to qualify for a Reverse Mortgage.

   3. The way you choose to take your payment is also crucial. You may take the money you receive as a line of credit, in a lump sum or as a monthly payment. With an established line of credit you will maximize the money you receive.
     If you are looking to receive the money as soon as possible, then it might be the lump sum option you choose. Receiving a lump sum will maximize the interest rate at its highest level.
     The monthly installment is set up so that every month you receive a payment. This means that you will receive payment for the rest of your life, no matter how long you live. (Some call this a "Tenure")

4. The interest rate is also a determining factor. The LIBOR Index or the U.S. Treasury T-Bill, determines interest rates for the Reverse Mortgage program.

5. The location of the property is also important because the loan limits change from county to county. These amounts vary according to the maximum loan amount.
It is important to check the maximum loan limit periodically since they may increase. If the loan limit increases, then you can refinance your Reverse Mortgage and possibly, get a higher loan amount.

     After you have met the five criteria’s, choosing where your proceeds go to can be a big decision. Investing the proceeds is one way to go. Some people need the money for personal bills.

     Even forms of healthcare, such as an operation, medicines or in home care. You can purchase life insurance so you can leave your family a inheritance.

     There are many options in the way you can spend the proceeds you receive from the Reverse Mortgage program. The one thing that the borrower has to maintain is the property.

     If the property is not maintained and the lender finds this out, then the borrower could be in danger of loosing the remains of the loan or even be penalized.