Many Things you can do with the Money from a Reverse Mortgage Loan
Seniors who take out reverse mortgages on their homes can use the derived cash for any purposes that they wish. Here are some popular ways to use the cash from a reverse mortgage. (Prepared from consumer stories shared with the NRMLA - National Reverse Mortgage Lenders Association)
An outdoor lover uses the money to explore and travel: Barbara Smith of Littleton, Colorado took out a reverse mortgage loan on her 1500 square foot patio home, which has two beds and a bath. The $55,000 she got from the reverse mortgage proceeds was used to get a new camper that she can use to travel and explore as she always wanted. Ms. Smith will also be receiving monthly payments of $814 for the next eight years derived from the reverse mortgage. Her financial planner is investing that money and by the time the reverse mortgage runs out, her investment portfolio will have hopefully grown, so she can use that money to live.
Other senior couples takes reverse mortgages to repair their bathroom and kitchen: John and Mary Williams in their eighties live in Charleston, SC. They had finished paying off their mortgage in 1997. They wanted to do a makeover of the bathroom and kitchen areas but couldn’t find the money to do so. They met with a reverse mortgage consultant to see if they can tap the home equity and get some monthly payments without needing to take on any new financial obligations. They decided to draw $20,000 from the reverse mortgage proceeds initially to cover the home repair costs. They then elected to receive $350 in monthly payments to supplement John’s retirement income. They are now happy that the bathrooms and kitchen are looking brand new.
Another senior couple took a vacation in Florida with the reverse mortgage money: Paul and Irene Alexander vacationed in sunny Florida for three months to escape the harsh New Hampshire winter. They found it relaxing and comfortable and had a gala time. Paul had retired some years ago with modest pension. Irene continued working full-time but soon lost her job. After researching reverse mortgages, the Alexanders decided to use the reverse mortgage proceeds to pay off an existing mortgage of $136,000 and an additional $15,000 was given to them as a line of credit. Paying off the existing mortgage freed around $900 a month which the Alexanders had saved for a vacation. They have two sons and a daughter but all are well-off and are standing on their own legs and don’t need the Alexanders’ property. The couple now do volunteer work to help the disabled and elderly people who need special care.
