Reverse Mortgage Situations and Applications

Reverse Mortgages, which are becoming more and more prevalent in today's society, definitely have their fair share of both advocates and critics.  Because of this, many people are often misinformed about how exactly a reverse mortgage could be of benefit to them.   As is usually the case in life, it is better to be educated about something before you decide for or against it.

This week, we once again meet with our resident Reverse Mortgage expert Bruce Parris, who shows us a few situations where these types of mortgages may be of benefit to senior citizens.

Bruce Parris

Mortgage Advisor

817-527-3165 office

1-866-205-2305 toll free

214-783-2235 cell

Hello folks, today let’s talk about a couple of situations I have found some of my clients in where a Reverse Mortgage helped them out substantially.

A spouse passes away.   The home has a $250,000 value and an $80,000 mortgage with a $625 monthly payment.  You want to stay in the home but your monthly income comes up short.  You could sell the house but you would still need somewhere to live.

Here’s a possible answer:  At 70 years old you take out a Tax Free* Reverse Mortgage.  The proceeds pay off your existing mortgage giving you an increase in monthly income of $625.  Plus you have a lump sum of $64,112 in tax free money that can be used anyway you want.

This couple is both 65 years old.  They have a home worth $700,000 with no mortgage.  They have sufficient income to live the life they enjoy.  They now have grand kids ready for college.  They would like to have a way to help out but there monthly income is not enough for what they would like to do.

Here’s a possible answer: They take out a Tax Free* Reverse Mortgage which nets them $344,533 tax free dollars.  They each can now give a monetary gift to the grand children each year.  Tax law determines the amount they can give each year.

Every situation is unique to the individuals involved.  Contact me for a no charge no obligation evaluation of your situation.

*Check with a tax advisor to verify current tax laws.

Reverse Mortgage proceeds are based on the current interest rates at the time of closing, the age of the youngest borrower and the appraised value of the home.  These examples based on an interest rate of 5.49%

As always, if you have any questions about Reverse Mortgages (or any type of home loan for that matter) please don't hesitate to CONTACT US and we will get back to you immediately.