Coeur d'Alene, Idaho resident in her early 60s and recently widowed, Joanne sought to leverage the equity in her house for retirement planning.  Although she had sufficient retirement funds, she was cautious about unexpected major expenses such as medical procedures.  Her home appraised for slightly over $500,000, and she had no mortgage or debt.  Joanne was not interested in receiving any money at the closing of her reverse mortgage.  She was proactively opening an avenue to access the equity in her home, tax free, should she need it at a future date.

Nevertheless, after completing the counseling and appraisal, she was able to obtain an FHA guaranteed Home Equity Line of Credit (HECM) exceeding $230,000.  Joanne’s HECM line of credit would be accessible to her throughout her life and would never be reduced or cancelled based on her home’s value or market conditions.  She recognized one of the significant advantages of a HECM Line of Credit, is that it is guaranteed by the Federal Housing Association’s insurance fund.  Her line of credit would grow at the interest rate of the loan plus 0.5%.  If left untouched, this would have an effect on the available balance of her line of credit to potentially double – to over $500,000 – in a decade and will always be available whenever she needs it.