Postponing your Reverse Mortgage

I understand that you are planning to wait for a few year before you do your Reverse Mortgage Plan. You probably don’t need the money now and when you are older, you will have more cash available. That is what would appear initially, but let me show you some numbers and explain how this works:

For this example let’s use the following information:

Age of homeowner = 69
Home Value = $200,000
Interest Rate = 5.12%

Using this information you would be able to put $119,324 in your line of credit.
Cash in your line of credit will grow at 5.62% (0.5 percent more than the interest rate)
If you didn’t use the cash until you were 74 (5 years) the amount available to you would be $157,935.

Age of homeowner = 74
Home Value = $243,331 (4% appreciation over 5 years)
Interest Rae = 5.12%

Using this information you would have $157,970 in your line of credit at age 74.

The difference between what you have is an extra $35 over 5 years (isn’t enough to fill your gas tank). But if you do your reverse mortgage plan NOW what are the advantages?

1. If a financial need arises unexpectedly in the first 5 years you have cash available.
2. If an opportunity arises unexpectedly and you need cash you have it available.
3. If a nursing home situation arises unexpectedly you have limited protection.

But these are arbitrary numbers and probably don’t fit your situation so to decide which is the best way to go, give me a call and we can sit down with the exact figures to determine which is the best option in your case.

Reverse Mortgage Man
(866) 800-0280
www.moneywise.net