Best Reverse Mortgage
Because reverse mortgages are so complex, there is no one size fits all ‘best reverse mortgage‘. A person interested in this loan type needs to do their research to find what the best loan will be for them. To illustrate how unique each individual borrowers situation is and how that affects what the best loan is we’ve provided a few hypothetical situations below.
Hypothetical Best Reverse Mortgage Case Studies
Julia’s Best Reverse Mortgage
Julia is 72 years old, she plans to go into aged care in the next 5 years but in the mean time she’d like to have a bit of extra spending money that she can spend on her children and grand children. Her house is worth $700,000, her nursing home expenses are expected to be around $250,000 and she’d like a loan of $70,000.
Because she only wants the loan for a short period of time (less than five years) Julia would be best off by getting a loan with low origination fees but a slightly higher rate of interest. Because Julia knows exactly how much she wants to borrow, she’d be best off getting a line of credit reverse mortgage.
John & Jessica’s Best Reverse Mortgage
John (aged 65) and Jessica (aged 63) have both just retired after 40+ years of working. They have a home that has recently been valued at $1,200,000. Their dream has always been to travel to Europe for six months and see the sights, they suspect this will cost them around $50,000. When they return they’d also like to top off their pensions with an extra $1,000 per month.
Because they are both quite young, it’s reasonable to expect that they’d have this loan for a long period of time. Because of this they would be best off getting a loan with slightly higher origination fees but a lower rate of interest. Because they want a lump sum payment plus an ongoing payment they’d be looking for something called a modified tenure reverse mortgage.
Sara’s Best Reverse Mortgage
Sara (aged 67) was a very successful clothes designer, she has recently retired and has a home valued at $600,000. She went straight into her profession without any formal training, she often feels like she missed out on rounding out her education by not going to university. She’d like to recitfy this by enrolling in an arts history course at her local university.
Unfortunately she’ll need an additional $4,000 every year for a period of five years. She’d be best off by getting a loan with avg origination fees and an avg rate of interest. Getting a loan with a fixed period of time for a fixed amount is known as a term reverse mortgage.
James’ Best Reverse Mortgage
James (aged 69) has a huge house (9 bedrooms) that was valued at $920,000. Recently James’ wife passed away, to compound issues further his last child moved out of him. This has left James with an extraordinary amount of home maintenance to perform, not only is this quite time consuming it’s also quite expensive.
James is considering getting a reverse mortgage for $40,000 to help pay for the home repairs that desperately need to be done. But is this his best option? Probably not. James would most likely be better off downsizing into a smaller home that he can manage by himself, alternatively he might look into getting some renters into the additional bedrooms to provide him with some extra income and to help manage the household.
The best reverse mortgage for you is going to depend on your unique situation, so why not enter your details at the top of this page and let an expert give you the right advice.