Other than having to pay off any existing liens on your property (a prior mortgage, home equity loan, tax lien, etc.), there are virtually no restrictions on how you can use your reverse mortgage proceeds. Here are a few of the more common ways people often use their proceeds. Be sure to consult your financial and tax advisor(s) regarding your particular situation.
Consolidate debt payments
Reverse mortgage proceeds must first be used to pay off any real estate secured loans (mortgages, home equity loans, etc.) if they are present, but you can choose to consolidate other debts such as car loans, credit cards and any other unsecured debts.
Cash for daily living
You can use the equity in your home to provide additional funds for things like utility and medical bills, landscaping or snow removal services, home repairs, travel or an emergency fund.
Funds from a reverse mortgage can help pay for any health care expenses including insurance deductibles, co-payments, in-home caregivers, physical rehabilitation or medical equipment.
Prescription Drug Costs
A reverse mortgage can help you obtain extra cash for brand name prescriptions.
Cash from a reverse mortgage can help you make improvements to your home such as siding, a new roof, deck, patio, landscaping, an addition, installing energy efficient windows, and more.
Aging in place
Staying in your home is a symbol of your independence. A reverse mortgage can help you make significant home improvements as unique aging-in-place challenges arise, such as curbless showers, handrails and grab bars, main floor laundry room, elevated toilets, lower kitchen cabinets, stepless entryways, wider door/hallways and stair/chairlifts.
Purchasing a new home
Reverse mortgage funds can help you purchase a new primary residence without having to qualify for a traditional mortgage, use your credit history or make monthly payments. You need your own funds or investments to cover the difference between the price of your new home and the reverse mortgage proceeds.
By using a reverse mortgage to leverage the equity in your home, you can potentially reduce your total estate value subject to taxation (consult your tax advisor). You can use your reverse mortgage proceeds to help in estate planning, early gift inheritance, supplemental income due to loss of a spouse, enhancing your total financial plan or reducing the draws needed to be taken from an investment portfolio during a market down-turn.
Get started now
To get an estimate of funds available to you and learn more about the reverse mortgage process, call 1-888-253-0712, submit your request online or visit a branch to speak to an M&T reverse mortgage specialist.