Reverse Mortgage Scenario Examples
Couple has been working for the past 40 years and are looking to retire at age 62.
Fred (65) and Brenda (62) Smith have recently turned 62 and are looking to retire. If they retire now, between their pensions and social security, their income will be about $3,200 a month. However, at this point their $250,000 mortgage has a payment of $1267 is preventing them from doing so. They can’t live off $1933. But they could live comfortably if they didn’t have to make the mortgage payment. They have a home worth $500,000. They don’t have the assets to pay off the $250,000 mortgage.
Answer: Fred and Brenda get a Reverse Mortgage thru Sierra Reverse Mortgage with a fixed rate. They payoff their current loan with a Reverse Mortgage eliminating their mortgage payment. They now can comfortably cover their property taxes, insurance and living expenses and retire in their house without ever worrying about a mortgage payment again.
Bernard (91) and Georgia (87) Connors are about to run out of their 401K and their house needs a new roof and other upgrades.
Fred and Georgia are living off their social security of $2100. They have been also living off their 401k, but that is about to run out. They haven’t updated their house. Their house is need of repairs but they don’t have any assets to pay for it. But they do have a free and clear house that is worth $210,000.
Answer: Bernard and Georgia get a Reverse Mortgage thru Sierra Reverse Mortgage with a Line of Credit feature. They have a line of credit that they can borrow $149,000 from as they need it. They are now able to get the money only as they need it to make all the needed repairs on their house. They can afford this on their $2,100 monthly income because there are no payments. And the unused portion of the Reverse Mortgage Line of Credit appreciates at a higher interest rate that any bank offers with a traditional savings account.
John (65) and Joan (67) are retired. They want to enjoy their retirement more by traveling.
John and Joan have a good income for their living expenses, but they don’t have any additional assets for any travel or any of their other bucket list items. They have a small mortgage $50,000 on a house that is worth $300,000.
Answer: They get a Reverse Mortgage thru Sierra Reverse Mortgage with a Line of Credit feature. They are able to pay off the current mortgage, and set up a Line of Credit of $112,000. Now not only do they have the money to travel, but they freed up an additional $575 a month that they were paying toward their monthly mortgage.
Richard (62) and Lois (61) want to retire, they have good pensions, but their pensions are falling just short of being able to cover their living expenses. They don’t want to draw social security until they are 65 to maximize their social security.
Richard and Lois have a mortgage of $100,000 with a payment of $850, on a home that is worth $350,000. They are about $1,000 short on their monthly expenses if they retire just on their pensions.
Answer: They get a Reverse Mortgage thru Sierra Reverse Mortgage with a Line of Credit feature. They also temporarily set up a direct deposit go into their checking account every month to cover their expenses. Because they are able to apply the money they usually pay the mortgage they only need to draw $250 a month from their Reverse Mortgage Line of Credit. They can now postpone their social security till they are each 65, which means they can maximize their social security retirement benefits.
Rose (85) recently had her husband pass away and her income has now dropped significantly.
Rose and her late husband were able to live off their social security of $2,000 a month because they had a free and clear house that is worth $250,000. But with her husband passing, her benefits were dropped to $1300 a month. She needed money every month to meet her living expenses.
Answer: Rose gets a Reverse Mortgage thru Sierra Reverse Mortgage with the Line of Credit Feature. Her line of credit is $175,000. She is able to set up a direct deposit of $1000 to go into her checking account every month. This brings her monthly income to $2,300. In addition, this will not interfere with her county benefits.
David (65) and Carol (62) want to buy a 2nd home in Florida to spend half the year at.
David and Carol have recently retired. They have a free and clear home worth $300,000 and good income. But they also want to live in Florida in the winter months. They have plenty of income for 1 mortgage to live comfortably, but they don’t have the assets for the down payment.
Answer: David and Carol get a fixed rate Reverse Mortgage thru Sierra Reverse Mortgage. They get $120,000 for their down payment on a condo in Florida. They now can buy their 2nd home and only have 1 mortgage payment.