Should I Do A Fixed Rate Reverse Mortgage Loan Or An Adjustable Rate?
Should I Do A Fixed Rate Reverse Mortgage Loan Or An Adjustable Rate
?On the surface, this sounds like an easy question. Everyone wants a reverse mortgage loan with a fixed rate, right? So how do you actually know if the correct choice is the fixed rate or the adjustable rate? Which program makes the most sense for you? Here are a few facts needed to help make your decision.
Did you know that with the fixed rate reverse mortgage you only get one option? It is to take all of your available equity in a lump sum. Knowing this will help you decide if this is the right choice for you. Some prior clients have used the lump sum disbursement in the following ways:
1. To pay off your current lien and the balance is high enough to leave you only a small amount of cash to be drawn.
2. You have a need for a large sum of money that consumes most of the funds. Examples would be if you are doing repairs or a remodel on your home.
3. You are purchasing an expensive item like a car, a motorhome, or even a second home. Again this should consume most of your available equity draw.
4. If you combine the above items and it uses most of your available equity.
The point is, that you want to place your money somewhere where you are getting the benefit of borrowing it. Don't forget, you are accruing interest as soon as you draw the money.
What should you do if you don't want or need all the available equity right now? This is where the reverse mortgage loan with an adjustable rate comes into play.