AgentMortgage

Should you use reverse mortgage to pay off home loan?

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Editor's note: This is the last in a six-part series. Read Part 1, Part 2, Part 3, Part 4 and Part 5. "I reached 62 this year and have a mortgage balance of $85,000 on my house, which is worth about $400,000. I plan to continue working and making my payment of $1,076 until the balance is paid off, which will be in another eight years ... Or should I pay off the balance now with a reverse mortgage?" Your question is relevant to all the baby boomers now reaching 62 who have mortgage balances. My answer depends on which of the four groups I describe below best describes you. You want the largest amount of cash possible in the future: In your case, I define "future" to be eight years when your current loan will be paid off. If you take a standard Home Equity Conversion Mortgage (HECM) now at age 62, draw enough cash to pay off your current mortgage balance, and leave the balance as an unused credit line, the line will grow from about $149,000 to $222,000 i...