Other Options to Consider

1. Finance/re-finance conventionally

If your income is sufficient to meet the “Stress Test” it’s possible to take money from your home with a regular mortgage. The amount will be based on your income and, with most people living on pension income, this won’t amount to much. Also, monthly payments are required and there will be a fixed term that will require the loan to be repaid or renegotiated when it is due.

2. A Second mortgage

This can be a good short term solution. If you are expecting a windfall shortly, renovating to sell or are comfortable with your current first mortgage and just need a small amount to get by. Second mortgages will be at a higher interest rate, incur lender fees and, most often, have only a one year term but they are not based on income, only the equity in your home.

Another use for 2nd mortgages is to supplement your reverse mortgage. If the amount you need is a little short of what you qualify for a small 2nd can sometimes be added on.

3. Home Equity Line of Credit

A HELOC can provide access to funds that don’t need to be drawn down all at once. Payment on the funds advanced do need to be paid monthly and the HELOC comes with a term. I have seen many cases in recent years where at the end of the term, the bank requires that the HELOC be repaid in full because the borrower no longer qualifies. Borrowers also need to qualify for a HELOC based on income.

4. Income Advantage

Income Advantage is another reverse mortgage option that allows the borrower to receive monthly payments instead of one lump sum. These payments accrue and interest is charged only on the outstanding balance. Terms are the same as a regular reverse mortgage with no payments required by the borrower and no repayment until sale or the passing away of the borrower.

5. credit cards

DON’T DO IT!