IT MIGHT PAY TO REPAY YOUR REVERSE MORTGAGE LOAN
Some five years ago, having arrived at a decision to spend your retirement years in the home you’d owned for decades, you two made a couple of related, very important choices: First, you applied for a reverse mortgage, using the equity built up in the home itself to finance an upgrade of the heating/cooling system and a bathroom remodel, but also to finance the purchase of a health and wellness center franchise. After successfully operating that business, you’ve just recently accepted an attractive offer to buy out your franchise interest.
When first weighing the pros and cons of the reverse mortgage, you were encouraged by the fact that there was going to be no need to make monthly mortgage payments,* and that there would be no tax on any withdrawals of equity. Now that you are about to come into a sizeable sum of money, you’re wondering whether it will be a good idea to put that cash “back into the house” by voluntarily repaying a large portion of the reverse mortgage loan.
When you make a voluntary payment into your reverse mortgage account, you increase your available line of credit for any future need that may arise, while reducing the compounding of the interest rate being charged on the loan. Remember, any unused portion of your equity continues to grow at the same rate as that being charge on borrowed funds.
Rates on reverse mortgages are higher than they were five years ago, so paying down the loan balance limits the amount of equity being consumed by higher interest charges. Repayments mean increasing your borrowing power for future needs.
https://mutualreverse.com/david-garrison
*Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.
David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org
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