What if I have an existing mortgage?

Having an existing mortgage does not prevent you from qualifying for a reverse mortgage.  However, you must qualify for enough on the reverse mortgage to pay off the existing mortgage balance. 
 
For example, if you owe $100,000 on your existing mortgage, live in a $250,000 home, and you are 70 years old, you would qualify for about $155,000 on a reverse mortgage.  This would be enough to pay off your existing mortgage in full and leave $55,000 for groceries, prescription drugs, repairs, pay off credit cards, or anything else you might need.
 
On the other hand, if your home were worth $150,000, you would qualify for about $90,000 which is not enough to pay off your existing $100,000 mortgage.  In this case, you would need to come up with $10,000 to make up the shortfall in order to move forward with a reverse mortgage. 
 
Most of my clients are getting a reverse mortgage to pay off an existing mortgage.  As daily living expenses continue to rise while their income remains the same, they find it harder and harder to make their monthly mortgage payment.  Before it gets to the point of foreclosure, they replace their current mortgage which requires payments with a reverse mortgage which does not.

Comments

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Posted by: Chinthya — 08/05/2012

You might check out the site that I've listed.Go to the snduett loan forum and do some reading. You might be able to get some ideas on what to do. If you cannot find what you are looking for, post your question. Someone may be able to give you some suggestions. I'm sorry I can't be of more help. I go to the creditboards forums every day, for credit related reading/learning. But I usually go to other forums than the snduett loan forum.

Posted by: George Kallam — 11/16/2010

As a self-employed man 68 years old with approx. $300,000 in equity, how do I receive a loan to make up the cash amount of $20,000 for a reverse mortgage?

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