Philadelphia Weekly

REAL ESTATE

3 ways to use reverse mortgage in home purchase

An industry at the crossroads

By Inman News Feed

Add Comment | Comments: 0 | Posted Jul. 23, 2012

However, if I wanted to use less than half of the maximum draw to purchase the house, retaining the rest as an unused credit line, the adjustable-rate HECM might work out better in a rising-interest-rate environment. While the amount I borrowed would grow at the rising rate, my unused credit line -- the amount I could have borrowed, but didn't -- would also grow at that rate, expanding my future borrowing power.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.