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Home » Long Term Cash » Reverse Mortgage Reverse MortgageSay you bought your house for $90k when you were 40 years old. It is now 25 years later (you are still a young 65 years old), your house is worth $500k and you only have a few thousand left on your mortgage. You decide to retire, and you want some of the equity in your house (you have nearly $500k equity in your house) to provide some income for retirement. At this point, you have a few options; sell your house and pull out all your equity, keep your house and refinance or get a home equity loan to pull out some equity, or get a reverse mortgage to slowly turn your equity into income. You decide to go with a reverse mortgage. You talk to some brokers and find that you can collect payments of about $400/month for 20 years, at which time you would owe $200k. You lock in this reverse mortgage and live in your home for another 20 years, collecting a nice $400/month the entire time. Now you are 85 and you are looking to move to a retirement community. Your house is now worth $600k and you owe $200k on your reverse mortgage. You sell the house, pay off the entire mortgage and you walk away with $400k in equity. You use that money to buy your condo in that nice retirement golf community you have always been looking at. Here are a few things to keep in mind when shopping around for a reverse mortgage:
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