- MemberApril 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.
- AdministratorApril 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.
- MemberApril 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!
- AdministratorApril 2, 2022 at 6:01 pm
You’re welcome! Have a good weekend!
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