Skip to content

#82 Using a reverse mortgage to supplement retirement income


David Garrison
Home Equity Retirement Specialist
NMLS # 1595194
Serving the State of Indiana
p (317) 644-2595 c (765) 516-0130
e [email protected]

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

May 3rd, 2022

Although the two of you had done a lot of carefully planning leading up to your retirement four years ago, the unusually steep rise in the everyday costs of living are beginning to throw you for a loop. Neither of you has an employer pension, but until recently you’ve been well able to manage your living costs with a combination of Social Security benefits, regular portfolio draws and a couple of part time consulting gigs in each of your professional fields.

Having decided to remain in your home, you had, prior to retirement, replaced the HVAC system, put on a new roof, and had some interior remodeling done, all of which has been paid for. Your cars are both in good shape, so it’s the food, heating/cooling, and gasoline costs that are starting to take their toll. Your children are both financially stable, so helping them is not a concern.  After having worked so hard to achieve your debt-free status, you feel forced to consider a home equity line of credit in order to avoid relying on credit cards for everyday needs. Of further concern is that your financial advisor told you that many banks are no longer even offering Home Equity Lines of Credit. (HELOCs)

A reverse mortgage may be a way to help cover your retirement expenses by borrowing against the equity you’ve built up in your home. Unlike a home equity line of credit, there will be no payments required of you so long as you continue to live in your home – you will be using your own “housing wealth” to help cover the increased costs of food, heating/cooling, and gasoline. There are no income requirements to quality for the reverse mortgage financing, and, just as you take “draws” from your portfolio, you can take “draws” from the equity built up in your home.  

Home equity can’t cancel out the fact that the present state of the economy is putting pressure on your carefully made plans, but a reverse mortgage may serve as something of an  antidote.