Using the Proceeds

There are virtually no restrictions on how you can use your reverse mortgage proceeds – other than having to pay off any existing liens on your property (a prior mortgage, home equity loan, tax lien, etc.).
Here are a few of the more common ways people use their funds. Be sure to consult your financial and tax advisor(s) regarding your particular situation.

• Consolidate debt. After paying off any real estate secured loans (mortgages, home equity loans, etc.) if they are present, you may consolidate other debts such as car loans, credit cards and any other unsecured debts
• Cash for daily living. Use your additional funds for things like utility and medical bills, landscaping or snow removal services, home repairs, travel or an emergency fund
• Medical expenses. Including insurance deductibles, co-payments, in-home caregivers, physical rehabilitation or medical equipment
• Prescription drug costs. A reverse mortgage can help you obtain extra cash for prescriptions
• Home improvements. Such as siding, a new roof, deck, patio, landscaping, an addition, energy efficient windows and more
• Aging in place. As unique challenges arise, a reverse mortgage can help you make significant home improvements, such as curbless showers, handrails and grab bars, main floor laundry room, elevated toilets, lower kitchen cabinets, stepless entryways, wider door/hallways and stair/chairlifts
• Purchasing a new home. Purchase a new primary residence without qualifying for a traditional mortgage or making monthly payments – you need your own funds or investments to cover the difference between the price of your new home and the reverse mortgage proceeds
• Wealth management. Leveraging the equity in your home can potentially reduce your total estate value subject to taxation (consult your tax advisor). You can use your reverse mortgage proceeds to help in estate planning, early gift inheritance, supplemental income due to loss of a spouse, enhancing your total financial plan or reducing the draws needed to be taken from an investment portfolio during a market downturn

Read on to learn more about this unique loan type, and visit our frequently asked questions for even more helpful information.