Proceeds from a reverse mortgage are typically distributed to you in one (or more) of these ways, depending on what you choose at the time of the loan:
1. Lump-sum payment
You receive the available amount in one payment at closing.
2. Tenure (monthly) payments
You receive a monthly payment for as long as you live in the home as your primary residence (and continue to meet the loan requirements).
3. Term (monthly) payments
You receive monthly payments for a fixed period (e.g., 10 years, 20 years), regardless of how long you live.
4. Line of credit (draws as needed)
You have an available balance you can draw from when you want. In many reverse mortgages, the available credit may grow over time (depending on the product and interest rate).
5. Combination option
Commonly, borrowers can mix payments (for example, some monthly payments + a line of credit for later).
Important notes
- Reverse mortgage payments are not usually automatically “given to beneficiaries.” Instead, proceeds generally go to you while you’re alive/eligible.
- If there’s a remaining loan balance when the home is eventually sold or you no longer qualify, the loan is repaid from the home sale (with any remaining equity governed by the mortgage terms).
Questions? Contact a trusted reverse mortgage specialist based in the Daytona Beach area.