Millions of Americans are afraid the value of their homes will stagnate or even drop. Many are predicting much slower appreciation rates in the future as this whole housing crisis shakes out.
If you are 62 or older there is a way to guarantee your home equity will grow. That's right, there is a way to GUARANTEE that your home equity will grow.
While so many pundits are out there telling the horrors of Reverse Mortgages very few have really taken the time to fully understand them. With a Reverse Mortgage in Kansas City, Missouri (and the rest of the country) you can get a guaranteed growth in the equity in your home each and every year. Our research shows that the 20 year average growth rate is about 6.54%.
One of the best features of the Reverse Mortgage is the Line of Credit (LOC) guaranteed growth rate. The amount of your LOC that is open grows by your interest rate each year. So if you had $100,000 still available on your LOC and the rate was 6.5% your LOC would be worth $106,500 after a year. If you didn't take any withdrawals from the LOC and the next year the interest rate was 7% your LOC would be $113,955.
We ran an example assuming a couple both 62 with a $250,000 house, a 2.5% appreciation rate and an average rate of 6.54%. Their initial line after paying their closing costs would be $107,853. By the time they were 82 (just 20 years) if they hadn't touched their LOC it would have $382,901 available on it where assuming a 90% net if they sold the house at that time would give them just $377,906. If they lived 30 years the LOC exceeds the estimated net of the house by $237,709.
The pundits would argue about the costs being too high. Well at 20 years after financing the closing costs and letting the interest accrue your balance would be $53,508 ($222.95 per month) is that too much to pay for the insurance of having guaranteed home equity to leave your heirs or access for needed care, bills, home modifications, etc?
Consult with a Reverse Mortgage professional that will share with you all this information. For more information go to www.stayinyourhomekc.com or call Kurt Jackson at 816-415-1737.
Comments(0)