Reverse Mortgage Strategy

Eliminate Your Monthly Mortgage Payment

For South Dakota homeowners 62 and older who want to stop making a monthly mortgage payment - without selling their home.

For many South Dakota homeowners approaching or in retirement, the monthly mortgage payment is the single largest fixed expense they carry. It does not shrink with age. It does not pause during a lean month. And on a fixed income, it can force difficult trade-offs - between healthcare, travel, helping family, or simply living comfortably.

A reverse mortgage can eliminate that payment entirely.

How it works

A Home Equity Conversion Mortgage (HECM) pays off any existing mortgage balance at closing. From that point forward, there is no required monthly principal or interest payment for as long as you live in the home as your primary residence. You keep the title. The loan balance grows over time as interest accrues, but the monthly payment obligation is gone.

A reverse mortgage is a loan - interest and fees accrue over time and the loan balance grows. The borrower remains responsible for property taxes, homeowners insurance, and maintenance. It is not a government benefit.

Who this fits

  • Homeowners 62 or older carrying a mortgage they would like to eliminate
  • Retirees on a fixed income where the monthly payment creates cash flow stress
  • Homeowners with significant equity who want to redirect that monthly cash outflow toward living expenses, healthcare, or savings
  • Those who want to stay in their home long-term but find the payment burdensome

What happens to the equity

The reverse mortgage pays off the existing loan balance first. If the proceeds exceed what you owe, the remaining funds come to you - as a lump sum, a line of credit, monthly payments, or a combination. Many South Dakota homeowners use those remaining proceeds to establish a growing line of credit for future needs.

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Honest trade-off Eliminating the monthly payment means the loan balance grows over time rather than shrinking. This reduces the equity available to heirs. If leaving maximum equity to your family is the top priority, a reverse mortgage may not be the right fit - and Jeff Buum will tell you that directly.

The right questions to ask

  • Do I plan to stay in this home for at least five years?
  • Can I consistently pay property taxes, insurance, and maintenance?
  • Would eliminating this payment meaningfully improve my retirement cash flow?

Related guides

Is a reverse mortgage right for South Dakota homeowners? How a reverse mortgage fits into a South Dakota retirement plan How much can you get from a reverse mortgage in South Dakota? Reverse mortgage overview