Are There Any Restrictions On How Reverse Mortgage Money Is Used

Section 5. Are There Any Restrictions On How Reverse Mortgage Money Is Used

In most cases, there are no restrictions on how you use the money that you receive with a reverse mortgage.

If you use a reverse mortgage to supplement your income by receiving some money each month, you can use the money for whatever purpose that you want to use it. You can use the money to pay bills, buy food, whatever. It does not make a difference.

If you use a reverse mortgage to have access to money in case of emergency, the money is simply available and no interest is charged until you use the money. When you do use the money, you can use it for any purpose that you want to use it. No one will look over your shoulder to see if there really was an emergency and no one is going to ask what you did with the money. It simply does not matter.

If you use a reverse mortgage to receive a lump sum of money, there may be certain restrictions. It depends on what the purpose is for receiving the money. For example, home repairs. If you need to replace the roof of your home or replace the heating and air conditioning system, the appraised value of your home may depend on whether or not the roof is replaced or the heating and air conditioning system is replaced. Because these repairs can affect the value of your home, a reverse mortgage lender may require that you use the money that you receive to make the repairs. In other cases where your home's value is not affected by how you use the money, there are not any restrictions and you can use the reverse mortgage money however you want to use it. For example, you can use the money to buy a car.

This ebook is for general information only and may or may not be applicable to your situation. If you have any questions whatsoever, talk with a mortgage broker or lawyer licensed in your state.

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