Reverse Mortgage To Improve Retirement Cash Flow

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Reverse Mortgage To Improve Retirement Cash Flow

As the American population is reaching retirement and they want to improve their cash flow, reverse mortgages are becoming more popular.  There are mistakes being made while considering a reverse mortgage however, and below are a few examples:

1) Waiting to look for a reverse mortgage until your home loan is paid off: This is the beauty of a reverse mortgage - your home does not need to be paid off to be able to tap into the equity!  An experienced lender will be able to tell you if you qualify for a reverse mortgage, and more than likely you can start receiving a monthly payment from the bank vs. writing a monthly check to the bank!

2) Assuming you must pay taxes on the reverse mortgage payments you will receive: This is a big assumption about reverse mortgages.  Because you already paid taxes on your money as you earned it before making your mortgage payment you do not owe taxes on the reverse mortgage payments you will receive.  The money is yours free and clear!

3) Going with a fixed rate reverse mortgage over an adjustable rate reverse mortgage (ARM): One often goes for a fixed rate mortgage vs. the flexibility of an ARM when purchasing a home, which makes sense when paying off the principal.  With a reverse mortgage however, your principal grows over time, and flexibility can be of value; imagine the benefit of being able to renegotiate your reverse mortgage and tap into equity as mortgage rates change!

4) Staying with your current lender vs. shopping for the best reverse mortgage quotes and products:  Your current lender probably offers a reverse mortgage, but there are many different products out there, and it could save you thousands to shop around and get rate quotes.  The lender who helped you all those years as you built equity in your home may not be the specialist you're looking for as you aim to maximize your cash flow in your retirement years!


There are plenty of lenders out there offering many different reverse mortgage options.  I have considerable experience in this area, give me a call, and benefit by getting the biggest monthly check from the bank that you possibly can!


Posted by



Ellen Adams with Academy Mortgage 


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Comments (1)

Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

Great stuff about reverse mortgages!  This is one product I haven't been involved with during a transaction (purchase reverse mortgage.)

Nov 12, 2010 09:46 AM