Uses

• There is no obligation that you spend the proceeds of a reverse mortgage a particular way. If you become ill, you can use it for medical expenses. If you have dreams of a costly trip, the money is available. Or if you simply want to create a reserve for emergencies, it can be used for that, as well.
  
  

Amount

• The amount of money you can expect from an RM is based on several criteria. For example, let's say that you and your spouse apply for an RM. You potential proceeds will be based on the youngest of the two people. In essence, the younger you are, the less you will receive from an RM. The proceeds are also based on the appraisal of your property. Other factors affecting the proceeds are the current interest rate and the limit of the bank's authority.
  
  

No Credit Checks

• With a regular mortgage, the lender bases judgment on your ability to repay the loan. Since an RM is based solely on the equity in your house, there will be no credit check when you apply.
  
  

Proceeds

• The proceeds of your RM can be paid out in a number of ways. First, it can be paid in a lump sum. Second, it can be paid monthly for the remainder of your life or it can be based on a fixed term. Third, it can be used to fund a line of credit that you are free to withdraw anytime. If none of these methods is satisfactory, the lender is free to blend any one of the three to meet your requirements. In each case, you will be responsible for the taxes and insurance on the property.
  
  

Expenses

• What has held more people back from getting an RM is the expense. First, because lenders tend to be conservative, the amount of money you will receive will be less than you expect. Furthermore, the costs associated with an RM are high based on the amount you receive. If you intend to move out of your home in two or three years, an RM is probably not for you.