- John Bosworth, Age 68
- Home Value – $250,000
- Home Equity – $210,000
- Approximate Mortgage Balance – $40,000
John takes out a Reverse Mortgage for $142,496. He takes a lump sum of $40,000 and applies it to his existing mortgage and the balance in monthly payments of $681. After paying the mortgage off entirely, John’s cash flow is considerably improved. He no longer has the monthly mortgage payment, and he has several hundred additional dollars a month from his reverse mortgage term advances.
Reverse Mortgage SCENARIO #2
• Martin, Age 70, and Maria, Age 68
• Home Value – $350,000
Martin and Maria are selling their current residence and netting $200,000. Using only those funds, they want to move into a new, single-level, modern home with three bedrooms and three bathrooms with a large kitchen (they love to cook and entertain). They do not want house payments. Their real estate agent tells them there are no homes available in that price range.
They purchase their new home with a Reverse Mortgage for Purchase. Instead of spending all of their sale proceeds, they are able to keep some of their money and still own their new $350,000 home without monthly mortgage payments. They will only have to keep up their insurance and tax payments, plus HOA dues if any.
- Craig Jenkins, Age 82, and Sylvia Jenkins, Age 79 (Reverse Mortgages are calculated using the age of the youngest home owner.)
- Home Value – $375,000
- Home Equity – $375,000
- Kathy Tobias, Age 63, and Rinaldi Tobias, Age 71 (Reverse Mortgages are calculated using the age of the youngest home owner.)
- Home Value – $165,000
- Home Equity – $165,000
They take out a Reverse Mortgage.They opt for term payments adequate for their needs. They can use the money any way they like and it more than supplements their need for gas and RV maintenance.
- Gordon Penilla, Age 62, and Joanne Penilla, Age 65 (Reverse Mortgages are calculated using the age of the youngest home owner.)
- Home Value – $850,000
- Home Equity – $850,000
Gordon and Joanne have no real debts, and their monthly income is adequate for them to live life as planned, but they would like to help out with the cost of college tuition for a grand child. For that, their income monthly and savings do not suffice.The Solution:Gordon and Joanne take out a Reverse Mortgage Credit Line. Each grandparent can now bestow an annual monetary gift to the grandchild.
Note 1: Reverse Mortgage proceeds are based upon the current interest rates at the time the loan closes, the age of the youngest borrower, and the equity in the home. The examples above are based on an interest rate of 6.26%.