As explained in earlier posts, a reverse mortgage can take the form of a lump sum. You agree the amount with the provider and then that is the amount that you receive when the mortgage completes.
So who is the type of reverse mortgage suited for and what are the pros and cons?
If you are particularly good at managing your money, then why change the habit of a lifetime? Instead, receive a lump sum and put your money to work like only you can. Investments, savings and speculation, if done right, can make a reverse mortgage very appealing.
Also, many people require a lump sum from their reverse mortgage because they are looking to make a big expenditure with the money. Perhaps you need a new car, planning on buying a holiday home or a summer house. What about that RV you have been looking at for years. Either way, you will probably need the money there and then, rather than in a line of credit form.
If you aren’t so good at managing your money or don’t have any other reason for wanting the money upfront, then perhaps a line of credit would be the best option.