The Liddle’s are 62 years old, they recently sold their home for $175,000, took the equity from the sale of the home (which incidentally was about $100,000) and purchased a new home for $265,000. The nice thing for them is that they were able to purchase the new home and never, ever have to make a mortgage payment again for the rest of their lives. They used a strategic financial tool called a reverse mortgage to make up the $165,000 difference. This government insured financial tool is literally being used by hundreds of thousands of seniors nationwide.
Here’s why the Liddle’s did it:
- No mortgage payment again, ever
- The new home needed to have ALL of their living needs on one level
- No yard maintenance or snow removal
- Close to family
- Close to medical and other civic facilities
- Close to folks their own age
- Brand new home that didn’t have deferred maintenance issues
Everyone knows that “cash is king” and monthly cash flow is a precious commodity. They now live in a new home, that’s perfect for them, and their monthly mortgage payment is now retired – forever.
With 10,000 baby boomers (possibly you, your parents or someone you know) turning 62 years old each day and according to the National Association of Realtors 41% of new homes being purchased were purchased by baby boomers. Reverse mortgages have become a popular and necessary financial home buying option.
For some of my seniors they ask, does this only work if you buy a new home? The answer is NO. You can use a reverse mortgage on your current home to either extinguish the monthly mortgage payment and potentially set up a new monthly payment that comes to you tax free. It’s up to you