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#59 Using A Reverse Mortgage to Finance Dental Costs


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

Eight years into full retirement, you have been able to maintain your lifestyle needs very comfortably, particularly given the nice gains in your portfolio over the past year or so. At the same time, two things have you worried: First, the recent dramatic increase in the price of food and gasoline has you concerned about sustaining your current lifestyle. Second, you are contemplating a series of cosmetic dental procedures that are not covered by any of your health insurance policies. You’re reluctant to spend, in just two payments (which would be needed to avoid incurring finance charges) an amount equivalent to nearly half your annual income. Your home is paid for, and your intention is to live there indefinitely. Mortgage payments would undoubtedly carry a lower interest charge than the medical loan, but you’re hesitant to take on a long-term, monthly debt obligation.

Tapping your housing wealth through a reverse mortgage might provide the answer to your several concerns. Set up as a line of credit, your mortgage would allow you to take a take two lump sum withdrawals to cover the costs of the elective dental procedures. These withdrawals would be tax-free. Longer term, your reverse mortgage could function as a safety net, to the extent costs of living escalate to the point where you feel unable to comfortably pay for groceries and gasoline out of your regular income. So long as you continue to occupy the home, you will not be obliged to pay off the loan. Of course, you’d continue to be responsible for property taxes, insurance, and maintenance (just as you are right now.) Since a reverse mortgage is a “non-recourse” loan, neither you nor your heirs will be liable for any amount that exceeds the then-market value of the home itself.

Seems as if tapping into your housing wealth could relieve your worry and help put a big, beautiful smile on your face!