Reverse mortgage, what are the payback options and how is the money accessed and distributed?

The reverse mortgage will be for my mother who is unable to manager her funds. How can I protect her funds and administer her monies safely? Is it possible to put restrictions on where and how much money is used?Reverse mortgage, what are the payback options and how is the money accessed and distributed?
Payback option - pay it off at death or permanent move. If you can pay it back earlier, you don't need a reverse mortgage. You need to form a trust with the proceeds of the reverse mortgage. The trust can say virtually anything your mother wants to say about how to administer and what restrictions. A trust attorney can do this relatively easily.Reverse mortgage, what are the payback options and how is the money accessed and distributed?
';If you can pay it back earlier, you don't need a reverse mortgage'; - Byron





I dont consider this comment true, first if you can pay a reverse mortgage back early - the more power to you. There is no prepayment penalty on the loan and you could essentially pay it back just like your regular mtg.

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You don't payback a reverse mortgage. The bank makes the monthly payment to you. Once it is paid off, the bank takes control and you move out. If she is unable to manage her funds, talk to a lawyer about having her declared incompetent (I forget the exact term) and you or an accountent would manage her money.
You have three options to have money distributed on a reverse mortgage. The first is a lump sum. Second is monthly payments. Third is a combination. In terms of managing her funds, you would probably need to set up a power of attorney or guardianship.





Be careful with a reverse mortgage. The money is not paid back until your mother moves out of her house or the house is sold. Reverse mortgages are expensive. On top of closing costs and points your lender may charge, there is also a 2% mortgage insurance premium rolled into the loan because this is a government backed mortgage. There is also an annual fee. The interest rates are high and are not fixed. When you run the numbers the reverse mortgage will use most of the equity in the house.





You might want to look at refinancing and taking cash out. Putting the cash in the bank and making monthly payments can help to supplement income, will put your mother in a better financial position and give you more options in the future. I hope this helps.