Questions about When to Get a Reverse Mortgage?
Reverse Mortgages have been around for quite a while, but I've found many still don't understand them. One of our area lenders, Liz Andersen, specializes in reverse mortgages, has an excellent reputation, and very graciously said yes to my request to write an article about the topic just for you! And I LOVE her title below as I, too, value the importance of thinking “outside the box” to find creative ways to help my real estate clients. Enjoy reading about one great reason for when to get a reverse mortgage…
Reverse Mortgage “Out of the Box” Financing
By Liz Andersen
Reverse Mortgages have come a long way in the last 15 years and are no longer being used just as a “last resort loan.” In fact, they are more and more being viewed as a wealth building tool. Take for example this “two for one” relocation scenario
with savvy buyers using the Reverse for Purchase option instead of putting all of their cash into one
property. [A great example of when to get a reverse mortgage.]
“Reverse For Purchase” Reverse Mortgage
The Smith family decided to sell their home in sunny San Diego to be closer to their children and grandchildren who lived in our Placer – Sacramento – El Dorado County area. Their original plan was to purchase their home using all of their net proceeds of $950,000 on their new home but after further research in the surrounding area they decided to purchase their primary residence using a reverse mortgage. YES! You can buy a home using a Reverse Mortgage!
They found their forever home priced at $800,000. Based on the age of 74, the interest rate at the time and the sales price, they qualified for a reverse mortgage loan in the amount of $308,500 and their down payment/cash to close needed was $491,500. That would leave them with ZERO principal & interest payments moving forward!
Of course, the borrowers are responsible for the property taxes, the homeowners insurance, any property fees such as
HOA’s, and proper home maintenance. And very important – the house must ALWAYS be the primary residence.
When all was said and done, they still had OVER $458,000 left over from the San Diego sale so they went out in search of an investment property. It took them some time to find what they were looking for, but they purchased this property for $450,000 cash!
Some of the Benefits This Created for the Family
- No principal & interest payments required on the primary residence FOR THEIR LIFETIME
- No payment on the investment property (besides normal home requirements such as property taxes, home/fire insurance, HOA fees, etc.)
- Rental income of $2,500
- Possible tax write off from having a rental property.
- $1,250,000 in the estate with two properties versus $800,000 with one property.
- $8,500 left over in funds after both purchases, no need to pull from other assets.
- Purchased two homes for the price of one.
- The investment property will be left to their children as their inheritance.
It was very important for the buyers to leave something to their heirs in the end and the reverse
mortgage was the instrumental financial tool in making this all come together.
Contact informations for Liz Andersen
NMLS #1263245
© 916-223-8869
Liz.andersen@apmortgage.com
BOTTOM LINE
Wow! Wasn't this a fascinating article by Liz? A great example of when to get a reverse mortgage and such a sweet and happy ending for her clients! If you are looking to downsize or rightsize into a new home, whether in a 55+ retirement community in Roseville CA area or a traditional neighborhood in our South Placer County arwith a single story home, but you also want to ensure your family is well cared for now and later, give me a call and let's check into all the different options available to you, including these interesting reverse mortgage options Liz may be able to provide for you.

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