One of the biggest reverse mortgage myths is that you cannot get a reverse mortgage if you already have a mortgage on the home. The truth is, you can get a reverse mortgage if you currently have a mortgage on the home or not. If you have a mortgage on the home, the reverse mortgage will first pay off that loan and no monthly payments will be required after that. You’ll only need to pay your property taxes, homeowners insurance, and home maintenance costs to avoid foreclosure. Any reverse mortgage proceeds you have left after paying off your existing mortgage are yours to use however you want.
Example of Using a Reverse Mortgage with an Existing Mortgage
Using real numbers, here is an example of how a reverse mortgage works when you have a mortgage.
Deb is 65 years old and has a home value of $150,000. Her current mortgage balance is $25,000 and she pays $650 every month for her mortgage (not including taxes and insurance). Deb qualifies for approximately $62,000 of reverse mortgage proceeds. These proceeds will first be used to pay off her $25,000 mortgage. That leaves Deb with $37,000 of proceeds to use however she wants. And since she is no longer required to make a monthly mortgage payment, she also saves $650 each month. Deb must continue to pay her property taxes and homeowners insurance and maintain her home to avoid foreclosure, so she puts a portion of the money she saves each month towards these costs.
See How Much Money You Can Get from a Reverse Mortgage
Do you want an estimate of how much you can get from a reverse mortgage and how much you will have left after it pays off your existing loan? Try our online reverse mortgage calculator. It will show you how much you may qualify for after your mortgage is paid off. Simply put in your current home value, your current mortgage balance, your zip code, and your age. No other information is required for you to receive an estimate. If you want a more accurate estimate, contact one of our licensed specialists. They can provide a custom quote and see if you qualify.
If you do not have a mortgage, you may be in an even better position to benefit from a reverse mortgage. Depending if you have a LESA, you could receive all of the proceeds you qualify for because you do not have a mortgage to pay off. Call a licensed specialist today to learn more.