A Reverse Mortgage Line of Credit (RMLOC) is a specific way to receive funds via a Reverse Mortgage. With a Reverse Line of Credit, you only draw the money you need, when you need it, and have an available credit line against your home's equity.
A Reverse Line of Credit offers a flexible financial solution for Florida homeowners aged 62 and older, providing a unique way to tap into home equity without the need to sell or leave their home. Unlike a traditional Home Equity Line of Credit (HELOC), the available funds in a RMLOC typically grow over time, potentially increasing the borrowing power available to the homeowner as they age.
One of the most appealing features of a RMLOC is its growth feature. The unused portion of the line of credit grows at the same rate as the interest rate on the borrowed funds plus an annual mortgage insurance premium. This means that as time goes on, if the homeowner does not withdraw the funds, the amount available to them can increase, providing more resources to draw from in the future. This growth occurs independently of the home’s market value, providing a buffer against declining home prices.
Furthermore, Reverse Mortgage Lines of Credit are highly flexible. Borrowers can choose to take funds as needed, which provides significant control over their finances. Importantly, borrowers are not required to make monthly repayments on the money drawn as long as they comply with the loan terms, such as continuing to live in the home, maintaining it, and paying property taxes and insurance.