Georgia Reverse Mortgage Proceeds
The amount of money available to the borrower is determined by five primary factors:- The appraised value of the property, whether any health or safety repairs need to be made to the house, and whether there are any existing liens on the house.
- The interest rate, as determined by the U.S. Treasury 1 year T-Bill or the LIBOR index.
- The age of the senior (The older the senior is, the more money he/she will receive).
- Whether the payment is taken as line of credit, lump sum, or monthly payments. Line of credit will maximize the money available, while lump sum provides the cash immediately, but the interest fees are the highest. Monthly payments are set up as a "Tenure" payment. You receive them for the rest of your life no matter how long you live.
- The location of the property and whether the maximum loan amount is subject to the maximum loan limits.
All these factors contribute to the Total Annual Lending Cost (TALC) as defined by the US Federal Government Regulation Z, the single rate which includes all the loan costs.
The money received (loan advances) are not taxable and do not directly affect Social Security or Medicare benefits.
However, an American Bar Association guide to reverse mortgages explains that if you receive Medicaid, SSI, or other public benefits, loan advances will be counted as "liquid assets" if the money is kept in an account (savings, checking, etc.) past the end of the calendar month in which it is received.
The borrower could then lose eligibility for such public programs if his or her total liquid assets are then greater than those programs allow.
It is important to note that the homeowner must ensure that taxes and insurance are kept current at all times.
If either taxes or insurance lapse, it could result in a default on the Georgia reverse mortgage.
Once the Georgia reverse mortgage is established, there are no restrictions on how the funds are used.
In addition to the tenure monthly payments, the borrower has the option of moving the entire amount of money into investments, or they can simply take the money and spend it as they wish.
More Georgia Reverse Mortgage Loan Information:
Georgia Reverse Mortgage Requirements | Georgia Reverse Mortgage Costs and Interest Rates | When the Georgia Reverse Mortgage Loan Ends | Georgia Reverse Mortgage Proceeds