Ask Terry Questions reverse mortgage when selling a home

reverse mortgage when selling a home

By Terry Savage on April 27, 2015 | Housing / Real Estate

After reading your article in the Baltimore sunpaper I,m curious about how you would see a reverse mortgage working in this scenario. I,m 74 as is my spouse our home is presently worth about 230,000 with no mortgage and a home equity currently at 26,000 my idea is to sell this home conventionally move to Florida, purchase a home with some of the proceeds and reverse mortgage the rest. Your thoughts please.

Terry Says:  OK, it seems to me that you are talking about two different things.  The first step is to sell your current home, pay off the $26,000 home equity loan — and then buy your home in Florida.  I don’t know what other assets you have, but you can buy a very nice condo or townhome in many parts of Florida for $200k.   Are you planning to buy a more expensive property and take on a mortgage?  (That might be tough if you are retired.)

If you’re buying the FL home without a mortgage, you can always do a reverse mortgage to get more income. BUT wait till you’ve been there and see if you really want to stay there.  RMs have big upfront expenses, and should be taken out only if you plan to stay in the home for a while.

Remember, (and from your question I think you might be a bit confused), you can only take money OUT through a RM if you have equity in the house.  You can’t “reverse mortgage the rest”!!

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