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Reverse Mortgage

Click to read more on the Fannie Mae Web Site

A reverse mortgage can be a great tool for retirement planning, but it’s important to weigh the benefits and drawbacks carefully. A reverse mortgage strategy should be a part of every retirement plan.

One of the main goals in a reverse mortgage is the reduction or elimination of your monthly mortgage payment.

This could save you thousands of dollars, adding to your retirement cash flow every month.

Here’s a rundown, both good and bad:

Benefits:

  • Access cash tied up in your home: A reverse mortgage lets you convert some of your home equity into cash, providing extra income during retirement.
  • Stay in your home: There’s no need to sell your house to access this money. You can keep living there as long as you meet the loan terms.
  • Flexible payment options: You typically choose how you receive the funds – a line of credit, fixed monthly payments, or a combination. There are no monthly payments required as long as you live in the home.
  • Delaying Social Security: With extra income, you might be able to delay claiming Social Security, which can increase your future benefits.
  • Remove your mortgage payment: Often you can get a reverse mortgage and have NO MORTGAGE PAYMENT for your lifetime! Call for details.
  • Downsize and have no mortgage payment: We can often help you downsize into a new home with little or no mortgage payment. Down payment requirements are dependent upon your current age. Call for more information.
  • Great option for long term planning: Staying in your home for many years is easier.
  • Easy solution for your heirs and executor: When the time comes to sell, your estate has several options. Your property can be sold and the equity divided according to your wishes; if there is no equity the property can be signed over to the bank with no penalty and no liens against your estate; or your family can choose to pay the reverse mortgage off and keep the home. Nice thing is your family has options that don’t exist with traditional mortgages. Call me to discuss this in detail, as it is an important feature that is designed to help your family.

Drawbacks:

  • Reduced equity over time: The loan grows with interest, reducing the equity you leave to heirs.
  • Fees and closing costs: Reverse mortgages can have higher fees than traditional mortgages. Often they can be rolled in, resulting in no out of pocket costs to you.
  • Risk of running out of money: If you live longer than expected, the loan could exhaust your home’s equity, leaving you responsible for any remaining balance when the house is sold.
  • Not ideal for short-term plans: Reverse mortgages are best for those who plan to stay in their home for a long time.

We are a great resource to learn more. Contact us with questions. We are glad to help you explore your options!