If a reverse mortgage is the right option for you, it's important to know that there are also many options within the reverse mortgage itself. These include: line of credit, lump sum payment, or,the least popular, scheduled tenure payments.
According to Reverse Focus, which published a video in May talking about the tenure payment as a long term solution for a retirement pension, this aspect of the reverse mortgage can be a saving grace for reverse mortgage borrowers because it offers equal monthly payments until the borrower(s) passes away or is no longer occuping the primary residence.
While not as popular as a reverse mortgage line of credit, which grows at a fixed rate and has unscheduled payments-- meaning the borrower can withdraw funds at their discretion until the line of credit is finished--the tenure payment option is an alternative for seniors hoping to become financially stable. The tenure payment option also offers a steady cash flow as opposed to a lump sum where homeowners receive the full reverse mortgage amount in one payment.
The predictability of a tenure payment can offer peace of mind to borrowers in their retirement considering the dire state of previous safeguards for retirement such as social security and pension funds. The unpredictability of the market is only one of the reasons why a reverse mortgage might be the option your looking for.
As a non-recourse loan, insured and regulated by the Federal Housing Administration under the Reverse Mortgage Program, a reverse mortgage insures that you will never owe more than your home is worth when the loan reaches maturity. In other words, FHA insures the loan with MIP, and will pay for any loses that come from the house going upside down. At PS Financial Services, our specialty is helping you choose the best option that fits your specific situation. While there are many options available to you, if you're looking for a safe retirement, a reverse mortgage can be the best option for you.