Mortgage Blog

Reverse mortgages: Useful retiree tool or bad move?

November 17th, 2015 | Financial Planning, Retirement Planning, Reverse Mortgage, Home Care, Government insured mortgage

Great article.  I agree that a Reverse Mortgage is best used when it can augment an existing retirement plan.  However, in many cases where that may not be an option, there is still room for ample benefit.  I would also like to add some clarity on the growth of credit for retirees and seniors so it is more easily understood.  When a homeowner is in a position to utilize a reverse mortgage where they have a substantial amount of available home equity (“principal limit”) over and above any mandatory payoff items like existing mortgages, the credit line growth factor within the government insured HECM Reverse Mortgage can provide a major benefit that should not be overlooked.  This can provide a significant benefit looking out only five to ten years and especially for cases where people are planning for thirty years of retirement.  For example, when someone pays off a mortgage(s) they increase their tangible monthly cash flow for living expenses. Beyond this, any untapped residual principle limit or otherwise termed available home equity will compound resulting in increased available credit each year as the homeowner ages.  In this scenario, if you use a Reverse Mortgage to help manage your monthly cash flow and preside over your remaining home equity very conservatively, using it only when absolutely necessary, you will position yourself to get the most out of the loan.  Don’t underestimate the power of compounding.  Get the numbers in your favor to win.  To summarize, use a Reverse Mortgage to pay off debts to balance cash flow and preserve your remaining available home equity so you can lean on compounding growth of the credit line for security.


George H. Omilan
President-CEO - NMLS# 873983
Jefferson Mortgage Group LLC
Helping seniors with Reverse Mortgages in Virginia, Maryland and Pennsylvania.

Questions/Comments encouraged.



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Jefferson Mortgage Group LLC

2536 Leeds Rd.
Oakton, Virginia 22124
FAX: 703-773-6946
NMLS: 935554

Located in Fairfax County, Virginia. Serving all of Virginia, Maryland & Pennsylvania. 


Jefferson Mortgage Group LLC is licensed in Virginia, Maryland & Pennsylvania.
Virginia State Corporation Commission License Number MC-5659 and the Pennsylvania Department of Banking & Securities #46259 
Maryland DLLR License #21586

An Equal Housing Lender

By refinancing the consumer's existing loan, the consumer's total finance charges may be higher over the life of the loan.

This material is not from HUD or FHA and has not been approved by HUD or any government agency.