Considerations For Structured Settlements And Reverse Mortgages
by Doug Smith

Structured settlements and reverse mortgages can provide income that can out satisfy your financial obligations. They can help provide peace of mind. However, there are important things to consider with structured settlements and reverse mortgages. Understanding what they are can help you make the right financial decision.

What Is A Structured Settlement?

A structured settlement is a deferred payment obligation, paid to you, as a result of the settlement of your personal injury claim. Often structured settlements are paid over time. A structured settlement plan schedules the payments up front. This can provide a steady, dependable, and predictable source income for the remainder of your life.

A structured settlement annuity issuing company guarantees payments according to the structured settlement agreement of the injured party. The payment and schedule are predetermined. Income from a fixed annuity is tax free, if it is awarded due to personal physical injuries or a physical illness.

A fixed annuity contract is issued by a life insurance company to create a structured settlement. The assets are invested in the insurance company's general account, and paid out to you over time.

What Is A Reverse Mortgage?

The most common type of reverse mortgage was developed by HUD and is called a reverse annuity mortgage. It requires you to be at least 62 years old. You must have live in the home and must have the mortgage paid off before you can enter this type of program.



The government is responsible for insuring your mortgage. Reverse annuity mortgages have been created to help aging citizens to be able to tap into the equity of homes that they have paid off. Sometimes a homeowner can qualify if there is enough equity in the home, even if not completely paid off.

Under this class of reverse mortgage, the homeowner will receive a tax free payment each month. The mortgage is paid off when the home is later sold. Under certain circumstances, the reverse mortgage can be paid to a qualified individual as a lump sum.

A qualified homeowner can also use a line of credit option. Generally the amount for which you qualify will be based on your age, home equity, and the interest rate charged by the lender.



Watch Out For Structured Settlement And Reverse Mortgage Scams

Scammers can prey on persons with both structured settlements and reverse mortgages. There may be unscrupulous people who try take advantage of the elderly . when large amounts of money are involved.

Research online for the best resources and information available to you. Please retain an attorney for any type of financial decision you make regarding structured settlements and reverse mortgages.

This article is ©2006 by Doug Smith. Got a structured settlement and don't know whether to keep it or sell it? Want to know how to get the most money out of it? Browse our library of free articles and tips on structured settlements. Visit StructuredSettlements.LoansForAnyCredit.com. This article may be freely reprinted as long as this copyright notice remains intact, the article is unchanged, and all hyperlinks remain active and clickable.