When it comes to finances a reverse mortgage is something that more people than not consider. That being said, a reverse mortgage is basically a lump sum loan against the value of your home or estate that is not payable until you either move or pass away. This is a common type of mortgage with older people that are retired and no longer have a steady income.
There are a few different ways that reverse mortgages pay out and one that is fairly common and popular is a combination payment system. This means that the money that you get for your home is not given in one manner. In most cases a combination payout will be a lump sum accompanied by a monthly stipend or payment. In most cases, the lump sum is a fraction of what the total mortgage is going to be.
One possible example would be if a home is assessed at $150,000. The person taking out the mortgage would not get the full $150,000 mortgage at once but would rather get a fraction and monthly payments. A feasible and common fraction would be one third of the total value of the mortgage. This would be about $50,000 then monthly payments on the remaining amount.
This would be tantamount to a pay off accompanied by a monthly salary. This is an option that most people choose as it does allow some upfront money but also adds the security of monthly payments. Those that take a combination option may also opt for a fund account in which monthly payments are made but from which lump sums can be taken for things like repairs, large bills, and unforeseen circumstances.