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How to Eliminate Mortgage, Credit Card, or Other Loan Payments With a HECM Reverse Mortgage

February 23, 2016 by HECM Pro

A reverse mortgage can be used to eliminate credit card debt.The quality of your lifestyle in retirement is largely determined by your disposable income, or the income you have left over at the end of the month after all the mandatory monthly bills are paid. If you’re carrying a lot of debt, those payments could be holding you back from the lifestyle you really want.

Many retirees with large mortgage payments, credit card balances, and auto loans often don’t have the free cash at the end of the month to do the things they really want, like improve their home, travel, or help send their grandchildren to college. Instead of living the retirement lifestyle they dreamed about during their working years, they’re living to pay the bills.

Get Rid of Loan and Credit Card Payments For Good

If you’re 62 years of age or older, the HECM reverse mortgage can enable you to get rid of existing mortgage, credit card, auto, or other loan payments for good. That means you’ll never have to make those payments again for as long as you live in the home. This could free up substantial cash that you can use for other purposes, such as taking a trip, covering medical expenses, doing home improvements, or building up your savings.

For some HECM borrowers, eliminating bills can mean the difference between finally retiring for good or having to work for the rest their lives.

So how does this work? Well, based on certain criteria (including age, the value of your home, and the specific HECM program you select), you’ll qualify for a large portion of the value of your home (find out how much you may qualify for here). Any mortgage balances outstanding on the home will be paid off first and whatever cash is left over can be used to pay off other bills.

As long as you keep up with the property taxes, homeowners insurance, and maintain the home as your primary residence, you’ll never be asked to make a payment on the reverse mortgage or pay it back in this lifetime. All those headache payments you’re tired of making are now completely gone for good. Imagine that!

How Much Can I Get?

How much you qualify for depends on the value of your home, the age of the youngest borrower, and what program you select (fixed rate or variable rate). To get an idea of how much you might qualify for, check out our free, no-strings-attached reverse mortgage calculator.