Reverse Mortgages Don’t Lose Money: Smart Owners Make Money!
Let me start with the easy part. You will not lose money. To begin the Reverse Mortgage
you trade your current mortgage to the lender who gives you a new mortgage for the amount of
money to pay off your current mortgage and receive in most cases a stipend based on the
equity in the property and your age. The new mortgage doesn’t have a Deficiency Clause which means that whenever you leave your property, you or your heirs can sell the property for a profit, if there is one or if you owe more than it is worth you send the keys back to the lender and you are through with that transaction. No loss!! Before somebody writes me and tells me that the house burned down; as long as you have the proper insurance, your fine. Still no loss.
Now let’s look at the money making side. I will enumerate the ways you can make money.
1. You get all the appreciation on the house from the day the transaction closes until it
it is sold. You make no payments yet the house appreciates 9 out of 10 times and
it belongs to you when it is sold.
2. You can make your old payment as long as you want to yourself. When you are through
with the house you will have your money in your bank and you get the appreciation as
3, The lender is charging you for interest on the payments that they are adding to your loan.
In #2 I said you can make your old payment to yourself, but that old payment is both
principal and interest. Just pay yourself the interest that the lender is charging. The
lender is not requiring you to pay the principal. Less payment means more profit.
4. If the real estate market takes off and looks like it may slow down or even reverse
the growth, you can sell the house and pocket the gain at anytime you want.
Open your mind and your wallet and let us show you all you can do with your knowledge of
Reverse Mortgages. No payments, but appreciation doesn’t need more money to work. Let’s
get together and see how this can work for you.!!!