The New Reverse Mortgage when you’re house rich but cash poor

The New Reverse Mortgage for when you’re house rich and cash poor

Frank and Lola had lived in and around San Diego for most of their lives. As much as they would like to stay in America’s Finest City, they really wanted to downsize and be closer to their kids, grand kids (and soon to be great grand kids) in the Inland Empire.

house rich

 

Frank and Lola’s problem

They had discussed selling their home and paying cash for a smaller home closer to their family. But the economics made little sense to Frank. “Then I’d be in the same position I’m in now but in a smaller home with a little more money in the bank”.

Related: 25 retirement solutions using The New Reverse Mortgage

Even though they preferred to own a home mortgage free, the economics of today’s market made that unlikely. So they talked with a local lender to see what options they had with a traditional mortgage.  That way they wouldn’t have to pay cash for their new home and would be able to put more money in the bank to help them with their retirement goals.

Unfortunately because the primary source of their income was Social Security they couldn’t qualify for a traditional forward mortgage to make this a feasible option. Plus, they were in no mood to carry a mortgage payment in retirement, so they continued to search for a solution.

Related: How to choose the right reverse mortgage lender

The New Reverse Mortgage to the Rescue –

Let me explain…

Frank and Lola had heard about Reverse Mortgages but were unsure if it was right for them. Their first step was to attend the mandatory HUD counseling. During the counseling session they got their most important questions answered and it cleared up the misinformation they had been hearing about The New Reverse Mortgage.

We met with Frank, Lola and Jolene and mapped out a strategy wherein they could sell their  home from which they would net about $552,000 and purchase a new one using The New Reverse Mortgage.

Sale Proceeds New Sales Price Down Payment Reverse Mtg Amt. Monthly Payment Equity Reserve Credit Debt &

closing costs

Paid

Cash Reserve

$552,000

$465,000

 $252,133 $212,867

$0*

 $232,965

$39,168

$260,699
*Homeowner responsible for payment of property taxes, homeowner's insurance and property maintenance 
Figures are for demonstration purposes only

Related: Buying a home with The New Reverse Mortgage

How do I know if a Reverse Mortgage is right for me?

If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.