How does a reverse mortgage work?

I get that question all the time.

The simple answer; it works great!  But really, you deserve a better answer than that so here it is.

We start by looking at two things:

How old are you?

How much equity do you have in your home?

From there we can make some calculations and provide the information you need to make your best decision.

Equity is, of course, the value of your home minus how much do you owe?  Value - debt = equity.

From there I develop some alternatives.

Do you want a lump-sum, monthly payments or a line-of-credit that you can withdraw from as needed?  If you do have a mortgage currently, that gets paid-off from the proceeds of the reverse mortgage.

Typically, in my experience, people take a lump-sum of a small amount of money and then leave the remaining money available to them in the line-of-credit.  This has some great advantages.

The money available in the line-of-credit grows!  This helps you, the borrower, keep ahead of inflation.  Let's say that you have $200,000 available in the line-of-credit.  Currently this is growing at about 6% per year, compounded monthly.  This means that, after one year, that $200,000 in available credit is about $212,335!  If you still don't take any money out it grows to about $225,431 at the end of year 2 in available credit.  I have seen many people use this to really develop financial stability.  Financial stability is the goal and properly using a reverse mortgage, to its greatest effect, is an important tool to get you there.

Every situation is different though.  Fill out the form or give me a call.  I will spend time listening to your concerns and needs, I will answer your questions and you'll be able to make a smart, informed decision and I will be there to assist you every step of the way.