You may have heard of a line of credit reverse mortgage and have been wondering since what the full story is.
A line of credit reverse mortgage is pretty much as it sounds – the provider assesses your eligibility for a reverse mortgage and decides exactly how much you are allowed to borrow. From then on, although you have been approved for that amount, you do not have to take it as a lump sum. Instead, you can drawdown from this approved amount, as and when you need it.
Of course the benefit of this is that you don’t have to pay interest on the money that you haven’t drawn. If you are looking for a reverse mortgage as a safety net – knowing you have access to cash as and when you need it – then this particular type of reverse mortgage is very useful.
Obviously if you are looking to buy a second home or a major purchase like an RV, the line of credit may not be for you and you’d be happier with a lump sum.