Reverse Mortgage Line of Credit
When you first get to know the definition of the HECM (Home Equity Conversion Mortgage) Line of credit, it’s often very difficult to understand different it is from the Home Equity Line of Credit that we all now. This is mostly because the structures that have been input in both these loans often seem similar. This is because in both cases the loans accrue interest on borrowed amount and their rates are variable.
The line of credit reverse mortgage still tops as the most prevalent method and option for seniors when it comes to choosing the method that they prefer accessing their reverse mortgage funds. A
No Mortage Payment
research done by the AARP confirmed that, 65.5% of the time, this choice sums up as the best choice for most borrowers signing up for the reverse mortgage. This method is usually ideal for the borrowers since it offers them freedom in planning their financial activities.
The credit line reverse mortgage however, is only limited to an adjustable rate, therefore, its often strange why it would become a more prevalent option as compared to the fixed rate option that is also available in the same context. The answer is to why the credit line is more prevalent is because of its flexible. This is the only method where borrowers get the option to take their money in a lump sum in the beginning. However, this option is only suitable for you if you will require the funds at the very beginning to pay off a mortgage or for other reasons. Therefore, the fixed option won’t be a great option for you in case you want to be able to access your funds as you go. The credit line makes it possible for borrowers to be able to get access of as much money as they need during the initial funding, they can therefore get access to their funds as they need. In case you want to learn more about this you could get in touch with “America Reverse” and get your Free No Obligation Informational Guide.
The benefits don’t end there; borrowers also avoid accruing interest rates on any amount that they are not using. Borrowers who find themselves in a position where they don’t need immediate access of the funds also don’t need to pay any interest. This is as long are not borrowed and also accessible to the borrower.
The only credit line that can avoid been frozen or closed is the Home Equity Conversion Mortgage, this is only if the borrower still has a balance on it. With the line of credit the borrowers get the line of credit growth. Please note that it’s not an interest earned, usually the unused amount of the loan grows as the credit accumulates interest monthly.
If you are interested in getting more information about reverse mortgages or need assistance in getting one, fell free to contact us and get your Free No Obligation Informational Guide. At America Reverse, we pride ourselves in offering our clients with the best quality service. Contact us today! Check out what Bill Medley from the Righteous Brothers to say about reverse mortgages.
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