The Legal Beagles wanted me to add this disclaimer … The examples I reference in this short video are examples of clients we have worked with over the past few years. I’ve not attempted to update the numbers to reflect current rules, interest rates or principal limit factors- all of which impact the amount of proceeds from a reverse mortgage. Only examining your specific situation would it then be appropriate to consider specifics. The purpose behind sharing these examples is to highlight the many ways a reverse mortgage could be utilized.

By the time a homeowner reaches the eligible age of 62, they have usually accumulated substantial equity in their home. As long as you’re planning on staying in your home for an extended period of time, a reverse mortgage can use that equity to help you live just a bit better or provide a financial safety net.

The most common use for a reverse mortgage is to pay off the balance of a traditional mortgage and get rid of your monthly mortgage payment. A reverse mortgage can be used to pay off your traditional mortgage so you no longer need to make monthly mortgage payments and only need to pay your taxes, insurance, and HOA fees on an ongoing basis.


If your home is fully paid off or is a low enough balance, you can obtain a reverse mortgage and choose to receive the proceeds in a number of different ways.

HUD lists five payment plans to choose from:

    • Tenure – equal monthly payments as long as at least one borrower lives and continues to occupy the property as a principal residence.
    • Term – equal monthly payments for a fixed period of months selected.
    • Line of Credit – you choose when you borrow funds at times and in an amount of your choosing up to the limit of the credit line.  The available credit grows over time as well.
    • Modified Tenure – a combination of monthly payments for as long as you remain in the home and a line of credit left in reserve for emergencies or take ticket items.
    • Modified Term – a combination of line of credit plus monthly payments for a fixed period of months selected by the borrower.

The funds can be used for: medical costs or long term care, home repairs or renovations, your dream vacation, purchase of a new car, existing debt, education expenses, taxes, or maybe a boat or summer home. The distribution of proceeds can be customized to fit your needs, so the opportunities are endless. A Reverse Mortgage can be the difference in living and living well.

A Reverse Mortgage for Purchase can be used to purchase a primary residence-upgrade or downsize. Move into your new home and have no monthly mortgage payment!

**This material is not from HUD or FHA and has not been approved by HUD or any government agency.**

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