I recently attended an informative presentation about reverse mortgages. Here are the notes I took away from the information which was presented to a group of real estate investors.
Fun Things You Can do With a Reverse Mortgage
First of all - Take Your Home Off The Table:
No matter what happens to the economy, to your income and to home prices, take some of your equity out and never have to make another mortgage payment for the rest of your life on your principal residence.
Buy Your Next Principal Residence for Half the Cash Out of Your Pocket:
Since there is no personal or estate liability on a Reverse Mortgage, if the price of your home goes up and you sell the home for more than it takes to pay off the mortgage, you or your estate keeps the money. Remember, it's YOUR home. If the values continue to decline and the sale doesn't provide enough to pay off the mortgage, it's not your problem.
Social Security Bridge Solution:
Take monthly amount from age 62 until your Social Security is completely vested at (for example) age 70 at which time you can start taking the MAX Social Security but you had cash flow from Reverse Mortgage during that 8 years instead of lower Social Security payments.
Pay Off Your Existing Mortgage:
And have no more mortgage payments for the rest of your life. This releases those funds used for mortgage payments to buy a rental home, help the kids or raise the quality of your life!
Use Your Home Equity to Buy a Vacation Home in
Hilton Head, Florida, or the mountains while they are on sale:
Remember, your total cash outlay is $325 application fee and no payments for the rest of your life - the Reverse Mortgage is on your Principal Residence - either here or there.
Establish A Line of Credit with a Reverse Mortgage Instead of a
No payments for the rest of your life. Cannot be cancelled. Cannot be lowered. Increases over time. Can be paid back and reused or not, your choice. No load acquisition costs. Not credit score driven. No income requirements. No personal liability. No estate liability. You still own the home and no payment for the rest of your life!
It's YOUR home - it's YOUR equity - use it to YOUR advantage!