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Should I get a HELOC or Reverse Mortgage?

I am 68 years old. I am trying to beef up my personal retirement fund for the long-term care of my daughter who has a degenerative disease and will require care the rest of her life. I have about $280k equity in my home and owe $72k. I have a small business of 14 years and my revenue from the business is about $65k annually. I have FICO score of 668. I have a lot of debt at the moment, $5,500/month. I would like to understand my best option to eliminate or reduce my mortgage payment for a period of time, so I can contribute more into the retirement fund. by Chu_adrianna1966718 from Dallas, Texas. 26 days ago Reply


Richard Woodward (RichardWoodward)
#41 ranked lender in Texas - 105 contributions

A reverse mortgage may be a good option for you depending on your age. I would be happy to run some numbers for you. Getting a HELOC would require that you continue to pay your 1st mortgage payment and also your new second mortgage payment (heloc) but could help you with your cashflow. I would be happy to help with either. Richard Woodward 214.945.1066

26 days ago
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Larry Gray (lgray_312_247)
#586 ranked lender in California - 1,137 contributions

First of all, kudos to you for caring so much for an adult daughter I assume. Where I reside there is a very high level of community support for a whole range of issues that people must face regarding caregiving and other needs. A reverse mortgage might be helpful, at least in eliminating a mortgage payment and possibly providing a reverse line of credit. A reverse line of credit comes from equity in your home within the reverse mortgage and so need not be repaid. Age 68 is considered somewhat young in how much, if any, a reverse line of credit you will receive. Certainly, having current debt consolidated in either the first mortgage or a heloc/2nd mortgage can alleviate some of the pressure you might be under per amount of monthly cash outgo. You will want to consult with a mortgage planner/consultant in Texas to compare your mortgage loan options, and do not hesitate to consult with more than one if you need to.

26 days ago
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,360 contributions

It's impossible to advise you without looking at your complete loan profile.. on the surface, a reverse mortgage might be attractive, but in all reality.. you are just increasing your mortgage balance each month as the interest charge is added to your balance.. the interest rate on a reverse mortgage is typically 1% or more higher than a traditional mortgage.. so a cash out refinance to pay off your other debt, and then recast your new balance over 30 years.. this could raise your mortgage payment, but overall by paying off other debt, it could lower your total monthly out go.. In all reality, you should contact a mortgage professional, let them look at your complete loan profile and once they have all the info, they can put together several scenarios that might be right for you.. I'm a preferred Lender with California and Arizona being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / LendUS, NMLS 1938/ AZMB0121893

26 days ago
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#1 ranked lender in Florida - 670 contributions

Sound advice from the panel

23 days ago
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Sara Deere (Saraloveshomeloans)
#1 ranked lender in Kansas - 531 contributions

Number crunching with just the provided information a reverse mortgage will help long term ease your future financial burden. Just keep in mind the future mortgage balance will need to be paid back when you are no longer able to live in the property permanently. Attaching a HELOC to your current situation will not help overall, because you are paying out more each month than receiving annually from your business. I would be concerned especially if personal and business expenses are not separate.

6 days ago
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