Here’s a strategy to help you downsize if you have a reverse mortgage.
Today I want to talk about reverse mortgages. A reverse mortgage is when the lender pays you money each month, and anyone who’s 62 years or older can get one. This money comes in either a lump sum or monthly payments, and you don’t have to pay it back until you sell the house, move to a retirement home, or pass away. On top of this, most of these reverse mortgages are insured by the government.
The problem today is that a lot of people with reverse mortgages are looking to downsize but have trouble competing with younger buyers. If you’re retired and house rich, it can be really hard for you to get a loan, but there is a way to deal with this.
Since 2019, the average home price in our area has gone up 30%. If you refinance your existing reverse mortgage, you can take that equity and use it as a down payment on a new home, which will be a reverse mortgage again.
Let’s say your home has $200,000 in equity. You can take out at least $100,000 to use as a down payment on the new home with a new reverse mortgage. Even if you’re planning on staying put, you should probably refinance your reverse mortgage. The interest rates now are much lower than they were in 2016 and 2017, so refinancing can give you a better interest rate and a lump sum of money.
If you have any more questions, don’t hesitate to call, text, or email me. I’d love to hear from you.