“This IS a Reverse Mortgage Customer!” Maria is 62 years old and still owes $125,000 on her $500,000 home. She has a good job and intends to work for another 6 years, retiring at age 68.  She has no problem making her $1,200/month P&I payment on her current mortgage (with a 5% interest rate), BUT she doesn’t want to have a mortgage payment after she retires and knows she can’t get her mortgage paid off before then. She is also concerned about having enough retirement savings to enjoy her retirement years. So, the LO suggested she do a Reverse Mortgage now, paying off her current mortgage, AND continue making her same monthly payments on the Reverse Mortgage for the next 6 years until she retires. Here is why this is a great strategy for Maria: She qualifies for $160,000 Reverse Mortgage. This pays off her existing mortgage, gives her $10,000 cash at closing to pay off a credit card, AND still gives her $25,000 in a LOC as an emergency fund. She continues making her $1,200 mortgage payment each month for the next 6 years.  At retirement, she can stop making mortgage payments since monthly P&I payments are NOT required as part of the Reverse Mortgage. With the LOC Growth feature on the reverse mortgage, dollar for dollar, those payments not only pay down the mortgage balance on the Reverse Mortgage, BUT it ALSO goes into and grows her Reverse LOC that she can access at anytime in the future. At retirement in 6 years, she stops paying on the Reverse Mortgage and she now: Only owes about $121,000 on her Reverse Mortgage (not much different than the roughly $95,000 she would still owe on the traditional mortgage without the required $1,200 payment!)Has a growing LOC that is now equal to about $142,000 and growing, which she can use for retirement to supplement her other retirement income. And NO LONGER has to make another P&I mortgage payment ever! All of this was achieved by using the Reverse Mortgage as part of an overall home equity financial strategy and not “just a loan” or a “transaction.“
 
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