Why a Reverse Mortgage is better then a Traditional Loan

   With a reverse mortgage, you have a debt that grows as you live in your home and make no payments.  With a refinance, you have a debt that you SLOWLY chip away at, taking the largest portion of your income and sending it into the bank, month after month, year after year....

   While a reverse may cost you thousands of dollars that is taken as an up front cost out of the money that you qualify for, a traditional loan will have payments that equal what a reverse costs, you just make smaller payments for these costs. 
    Eventually, in terms of how much cash actually leaves your pocket, the regular loan will out-cost the reverse, it is just a matter of time!

   Example - Jim is looking into a reverse or a refinance to alleviate the remaining $45,000 on his current mortgage.  His home is worth $200,000, he lives in Florida. 

 
   If he does a reverse mortgage, it will cost him about $10,000, none of which is out of pocket.  So, he gets the $45,000 paid off, and now takes the additional $55,000 in tax free cash that the reverse allows him to borrow.  HE NEVER SENDS IN A PAYMENT ON THIS LOAN!

   If he does a refinance to access the same $100,000 ($45,000 plus the $55,000), his payment to the bank is $1000 per month.  In twelve months, he has paid, out of pocket, $12,000.   

   The next year, this refinance cost him $12,000 again, and so on and so on.....Each year, this loan cost $12,000, while the reverse option gets paid in one payment at the closing.