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Payout Options – How Reverse Mortgages Work


Reverse mortgages pay you in a variety of ways. You can receive a lump-sum, periodic payments, a line of credit, or some type of combination.

Lump Sum

This one is easy. You get the loan balance all at once. Do with it what you will, but there won’t be more for you tomorrow.

Periodic Payments

If you sign up for a periodic payment plan, you’ll get regular payments. These payments might last for a number of years (10 years, for example), or until your loan comes due (often as a result of your death or your moving out of the home).

Line of Credit

If you don’t know exactly how much you’ll spend or how soon you’ll need it, a line of credit may make sense. Some reverse mortgage lines of credit are “growing” lines of credit – meaning you may have more and more money available to you as time goes on. Not bad.


Can’t decide? You can use a combination of the programs above. For example, you might take a smaller lump sum up front and keep a line of credit for later. This may be a reasonable approach if you need to pay off existing debt with a portion of your reverse mortgage loan.

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