2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894
May 17th, 2022
Five years ago, having made the decision to spend the rest of your lives in your home, you used just under half your reverse mortgage line of credit to remodel the residence, adding a downstairs master bedroom with an adjacent a walk-in bath.
Meanwhile, as you work to “rebalance” your investment portfolio, reducing the allocation to stocks and increasing holdings in “fixed dollar investments”, you’re considering “investing” in your own reverse mortgage by making voluntary repayments. Since interest rates on CDs and, money market accounts are still quite low, you figure you can come out ahead by putting the money back into your own “account” at your reverse mortgage.
Since you chose to access your housing wealth though a line of credit (as opposed to a fixed monthly distribution), and you have unused funds in your line, your credit line is growing over time. You’ve correctly understood that making voluntary payments is a way to “grow” your home equity. You might also consult your tax advisor about whether you could qualify for an interest deduction if and when you make a large payment on your reverse mortgage.
You are discovering that your reverse mortgage has turned your housing wealth into a “revolving line of credit” that you can use for many purposes, including rebalancing of investment asset categories.
In a way, you’re learning, your voluntary reverse mortgage payments can stand in for dollar portfolio picks.
https://mutualreverse.com/david-garrison