Reverse Mortgage: Ways to Get Paid

2. Your balance will include the total amount you borrowed, plus accrued interest and mortgage insurance premiums. It’s due and payable usually from the proceeds from the sale of your home. Any money that’s left over goes to you or your estate, according to reverse mortgage lender Fannie Mae (Stock Quote: FNM).

3. A borrower can live in a nursing home or other medical facility for up to 12 consecutive months before an HECM loan must be repaid, according to the Federal Trade Commission. In some cases, this 12-month limit may be negotiable, Bell says.

4. A lump sum payment could affect your eligibility for government benefits. You don’t usually have to pay taxes on your reverse mortgage payouts, but getting a lump sum payment could affect your eligibility—or your spouse's eligibility—to get certain state and federal benefits, including Medicaid, according to the Financial Industry Regulatory Authority.

5. You may have to pay a fee to change your payout option. You can change your payout option whenever you want, as often as you want, but your lender will likely charge you an administrative fee of about $35, Bell says.

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