Good Afternoon,HUD determines the benefits every borrower will receive based on the age of the youngest borrower on the loan, the interest rates in effect at the time, and the value of the home or the HUD lending limit, whichever is less. Then the funds are made available to the borrower(s) following HUD's schedules to deliver funds. If you need all the funds to pay off your current loan or to purchase a new property, all the funds are available immediately. If not, then HUD limits the money you can receive at closing or in the first 12 months. On the line of credit, any funds you cannot take because of this limitation you have access to after the 12 months (literally, on day 366, you can access the remaining funds). However, the fixed-rate loan is known as a one-time draw program. In other words, you are limited to only one draw on the fixed rate program, which is the one you take at the close of the loan. There can be no further or future draws on the fixed rate program, so borrowers must take 100% of all money available to them with the fixed rate program at the time the loan closes (unlike the adjustable rate program with which borrowers can take multiple draws of any amount at any time up to the limitations of the program). So, let's look at how these two programs might compare and when the fixed-rate might result in unusable funds.Firstly, let's assume that the borrower in each case has a Principal Limit of $100,000.00 and no mortgage to pay off. HUD says that only 60% of the funds may be taken at closing or in the first year when the loan is not used to pay off an existing loan or buy a new home. With the adjustable rate loan, the borrower can take $60,000 at closing or any amount up to $60,000, and then, after the full year, they can request any amount up to their full remaining balance available or leave it in the line of credit to be accessed later. With the fixed rate, though, the borrower must take the full draw of $60,000 at closing (there is no option to take less). Then they lose access to the other $40,000 as they cannot take additional draws with the fixed rate program. That borrower never owes the additional $40,000 because they never borrowed that part of the money, but they lost their ability to draw those funds later as those funds are now unusable. In this case, the fixed-rate borrower lost access to 40% of the funds, which is unusable to them.Another time that fixed-rate borrowers can lose access to funds is when they must set funds aside for repairs, etc. Remember that the fixed-rate loan is a single-draw program. You can only get one draw of funds from the lender. If you must do a repair set aside to make repairs to the property, the lender will set aside 150% of the cost of the repairs. Borrowers need to realize that although the term is to set these funds aside to ensure that the repairs are completed, the funds are actually never borrowed. The lender doesn't put money anywhere on behalf of the borrower. The borrower will not receive any additional funds back later as a separate check either. The borrower owes less on their loan. Again, there can be no further draws with a fixed-rate loan, so these funds were unused and not considered borrowed. They are another way funds would be calculated as part of the reverse mortgage loan but could be unusable for the borrower. The good thing for borrowers is that they can avoid unusable funds by choosing the line of credit option over the fixed rate option. And secondly, if they do choose the fixed rate option knowing, they will have funds that will be unavailable to them. As a result, the borrower will only accrue interest on funds they receive and do not need to repay the funds that are unavailable to them. Essentially, the balance owed is adjusted for only those funds available to the borrower. Suppose the borrower knowingly chooses the option that makes some money unavailable to them. In that case, it does not "cost" them any money. It just gives them access to less money with their loan.

Thank you Zia. We don't believe you should have to give us all your information and a DNA sample just to find out if a reverse mortgage will suit your needs! ;>)This loan should be all about you and your needs and while it is an FHA-insured loan and therefore we have to follow certain rules, we never forget this fact.