Reverse Mortgage Examples

An 84 year old woman had social security income, modest savings, and a free and clear house worth $62,000. She wanted to stay in her home. She could handle her monthly expenses, but did not have cash for $3,000 of roof repairs or to visit her daughter in California. A reverse mortgage offered her tax free income for life of over $300 per month for life or a lump sum of over $38,000. She chose to combine a lump sum of $3000 with a monthly tax free income for life of over $270.00. The additional income will permit her to visit her daughter in California.

The son of an 84 year old woman needed financial assistance. His Mother lent him the $47,000 lump sum proceeds from a reverse mortgage on her $90,000 home. He is now paying her back, but she has the comfort of knowing that even if he were to fall behind in his payments, her house is safe since there are no payments due on the reverse mortgage.

A couple in their early 70’s with a $175,000 home qualified for a lump sum reverse mortgage of $106,000 or monthly income of $670 for life. They used $30,000 to buy a new car and some other items, and have improved their lifestyle with a monthly income of $469 from the reverse mortgage. (They could elect to reduce their monthly income and draw down on the remaining $76,000 lump sum at any time.)

A retired professional in his late 70’s and with a free and clear home worth in excess of $475,000 qualified for a lump sum reverse mortgage of $205,000 or $1600 monthly income for life. He used $50,000 for home improvements, and now has a monthly income for life in excess of $1200 from the reverse mortgage.