On the surface, this sounds like an easy question. Everyone wants a reverse mortgage 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. Fixed rate reverse mortgage loans require you to take all the available equity as soon as your loan closes. This is the most important thing to know, since all your decisions will be based on this.
Some examples of why you would want to take the money up front are:
1. You have a mortgage that needs to be paid off that will consume most of the funds you are going to receive from your reverse mortgage.
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. Buying a vacation home, automobile or a motorhome that will use up a good portion of your equity that is available.
4. Mixing the above items is an acceptable way to use the remaining equity. The idea is, if you have a place to put (or spend) the money, it won't be a burden to have it "sitting around". You have to keep in mind that you are accruing interest on any money that is drawn or borrowed.
Now that you know some of the facts you might be saying, "I don't want to take all the money at once." In this case, the adjustable rate reverse mortgage just might be the correct loan for you. You can get more reverse mortgage information or read other articles written by David Prulhiere Like "Pros and Cons of an Adjustable Rate Mortgage" by visiting Redwood Reverse Mortgage.
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