Term Payments for Reverse Mortgages

The term option allows individuals to access reverse mortgage proceeds in equal monthly payments for a set period of time. They work similar to an annuity, payable in set installments. Unlike the tenure option, term payments have a set finish date.

Term payments treated as loan proceeds, not income. For this reason, they are not taxed on the federal level and will not inhibit Medicare or Social Security eligibility. Most banks require borrowers to set up direct-deposit into their checking or savings account.

Individuals may not want to consider tenure payments if they have immediate cash needs rather than long-term supplemental needs. Borrowers may want to consider the modified term payment option if a combination of needs exist.

To review the amount of term payments available for you or a loved one, run their no-cost FROG report. FROG reports are free to all US citizens aged 62 years or greater and their immediate family members.

For more information on reverse mortgage options call 866-508-HECM.