Yes, you can make payments on a reverse mortgage. In fact I think it is a great idea. Especially if you have the adjustable rate reverse mortgage. As you may know the adjustable rate reverse mortgage can provide a line of credit option for the borrower. If you have this option and you make payments on the loan, not only do those payments affect your loan balance, they also impact your credit line in a good way! So, your loan balance is lower and your credit line is higher. Add to that the guaranteed growth rate on a HECM line of credit and you can be well on your way to establishing a growing emergency line of credit to use for your future. If you never tap into the line of credit funds, you have in effect kept your loan balance down leaving more equity to your heirs.
This can be huge as you age from sixty something to eighty something. The line of credit may be accessed to pay for in home health care, home modifications or other services allowing you to ”Age in Place”. If you never need the money, the equity is in your home waiting for your heirs to inherit. (don’t forget to talk with a professional financial estate planner about any inheritance and estate tax consequences.)
Personally, I like the idea of a senior homeowner using an adjustable rate reverse mortgage as a “lifetime loan” and continuing to make payments - Here’s how I envision it:
A 62 year old refinances his current mortgage with a reverse mortgage. He makes monthly payments on the reverse mortgage while he’s still working and can use the tax decuction. He does this for 10 years and at 72 he retires and stops making payments on the reverse. No more house payments is a financial relief and helps him to preserve his lifestyle. His built up line of credit continues to grow over time according to the adjustable growth rate. At 85 he starts to draw from his line of credit to fund a weekend helper to keep up on the house and to pre-cook a few meals for freezing and reheating during the week. The line of credit funds the help he needs to safely remain at home where he prefers to be.
I know that not every senior wants to stay in their home until they die. Many of us look forward to living our elder years in a modern, active, resort style senior community with lots of amenities, activities, transportation, help with housekeeping, meals included.... sort of like a cruise ship lifestyle at home. But for those who prefer to remain in their home, a reverse mortgage might just be a way to achieve that.
In either case, a 62 year old who refinances into a reverse mortgage and keeps making payments is giving himself more options for the future. The ability to stay or go whichever suits his needs and wishes at the time.
By Deborah Nance
Your Local Southern California Reverse Mortgage Professional
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iReverse Home Loans, LLC, NMLS#810502 originates reverse mortgages in Alabama, Alaska, Arizona (MB-0919584), California, Colorado, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon (ML-5378), Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont (1164-MB), Virginia, Washington and Wisconsin.
Important Information: Reverse Mortgages are neither "endorsed" nor "approved" by the Federal Government. The FHA (Federal Housing Administration) provides certain insurance benefits for lenders and borrowers in connection with the lender’s HECM loans; the FHA does not make or originate loans. The owner(s) retain title to the property that is the subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurance, maintenance and related taxes. Failing to pay these amounts or failure to maintain the condition of your property may cause the reverse mortgage loan to become due immediately. A reverse mortgage is a complex loan secured by your home. Whether such mortgage makes sense for you depends on your financial situation and needs. For these reasons, we strongly recommend that you consult with a qualified independent housing counselor, family members and other trusted advisers before making this decision. This website is not from HUD or FHA and was not approved by HUD or any government agency.