Here Is How Ron S Reverse Mortgage Loan Worked Out

A Reverse Mortgage Scenario

Ron Atkins was a 62-year-old gentleman who owned a townhouse in Burke, VA, appraised at $455,000. His pension met most of his needs, but he heard about a type of Reverse Mortgage called the “Line of Credit” variation, in which the unused portion grows at a guaranteed annual rate each year.

Here is how Ron’s Reverse Mortgage loan worked out:

At Closing, Ron was able to:

·  Achieve a Reverse Mortgage in the amount of $253,203;

·  Pay off an existing $8,000 lien on his home;

·  Include all of his closing costs in the loan;

·  Set up a “Line of Credit” for $226,062 that would grow at a fixed annual rate of 2.87% each year.

Over the next 9 years Ron was able to:

·  Live payment free in his own home;

·  Withdraw $12,000 per year---tax free (knowing he could modify this amount at any time);

·  Live with the peace of mind of knowing that he always had access to readily available tax-free funds;

·  Preserve, protect, and even enhance the value of the property for his sons.

When Ron passed away, in the ninth year of the loan, his sons chose to sell the home and were able to:

·  Sell it for a purchase price of $593,521 – an average annual increase of 4%;

·  Claim a tax deduction on their own taxes, for their father’s entire accrued interest on the loan;

·  Repay the mortgage balance and net $431,010!

More than they would have inherited if their father had sold the home nine years before! This scenario would be even more powerful if Ron had taken the money out on an “as needed” basis!

207 South Alfred Street s Alexandria, VA 22314

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