Seniors: Do You Know About Reverse Mortgages?


Hear two different true stories that demonstrate how reverse mortgages can help senior buyers purchase a home without adding monthly payments to their budget.

Today I’d like to talk about two scenarios, both of which are true case studies. In each scenario, a reverse mortgage helped the senior buyer to do away with their monthly mortgage payment.

The first refers to a home in Orange County for $950,000. The mortgage is still about $550,000. After the selling cost and the commission, the net amount is about $330,000. How would you buy a home for that amount in this current California market?

Since you’re planning to retire, you don’t want to worry about a higher mortgage. A solution to the problem is a reverse mortgage. This allows you to use the equity in your home to be converted into cash or a payment towards your mortgage, which means no monthly payment.


Since you’re planning to retire, you don’t want to worry about a higher mortgage.


The second scenario is about a single woman whose home is worth $550,000. She wants to move close to her children, and the home she’s interested in is $600,000. The solution here is similar: She can put $300,000 down and use the other $300,000 in a reverse mortgage so that she doesn’t have a monthly payment. She’s only obligated to pay the property tax and the annual homeowner insurance fee.


I have been able to put people into an investment vehicle like a Delaware Statutory Trust (DST) or in a TIC (tenant in common). For triple-net properties and A-Class, accredited types of investments, they can put it in and the return is between 5.25% - 6.25% depending on the offering from the sponsor.


Returning to the woman in the second scenario, with the $200,000 she has after the down payment of $300,000, she can get roughly an additional $11,000 to $12,000 a year in income that is fully sheltered.

Outside of this topic, I want to give a client named Quentin a shout-out. He told me about an area right here in Southern California with an affordable retirement community called Paumer Valley. You can find a 3-bedroom, 3-bath, 2,000 square foot home for $350,000. It’s a great community.

I’d love to hear from you. If you want to hear more about reverse mortgages for example, I’d be more than happy to bring in an expert to discuss your specific case. Just give me a call or send an email. Stay safe and stay happy!

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