• # Confirmation of Calculator #’s

2 Members · 4 Posts
• ### Jack Jensen

Member
April 1, 2022 at 9:10 pm

Does it sound correct, that a current \$160k in equity would result in, for an 83 year old person, just a \$7,640 Line of Credit? With \$0 more after 1 year. That’s the extent of the “payout”, after paying off the current mortgage (specs are \$340k value, \$180k owed)? Likewise, doing a Tenure plan, results in just \$82/mo. for 10 years, a total payout of \$9,840.

What am I missing in terms of the “virtue”/benefits of this? I guess this scenario is not a best-case one, due to the large amount still owed on the mortgage. And so odd that after 10 years, there will be over \$200k of equity in the home, still not being used, which I thought was the purpose of this program. To be able to tap into that.

• ### Mike Roberts

April 2, 2022 at 7:13 am

Hi Jack, those numbers sound about right. The reverse mortgage is designed to give you access to a portion of your equity – not all of it. You have a fairly large mortgage balance, so most of the proceeds are going to that. Don’t forget that by paying off the mortgage, you’re getting rid of a mortgage payment. I don’t know how much your mortgage payment is, but on that balance, I have to think the principal and interest payment is around \$800 to \$900 or more per month. Whether you’re saving \$800 or \$900 per month or getting an extra \$800 to \$900 per month in income, the result is the same: more monthly cashflow for you. It sounds like a reverse mortgage has a lot of benefit! You don’t have to be stuck with a mortgage payment for potentially the rest of your life and you can instead use what you were paying toward the mortgage for something else.

• ### Jack Jensen

Member
April 2, 2022 at 3:34 pm

Thanks for confirming the numbers, Mike. It’s for my mother-in-law, as my father-in-law is in hospice. Looking like selling and downsizing will be required, unfortunately. Besides the mortgage, they have HOA fees, too. Thanks again for the info!