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Redlands Reverse Mortgage Story

It seems to be easy for folks to learn through stories, so I thought I'd post about a client in Redlands, California who just closed on her reverse mortgage.  

Redlands Reverse Mortgage Story

A younger senior, in her late 60's, Ms. B husband passed away almost 10 years ago and it's been a struggle to make it on one income.  When her husband was alive, they refinanced the home to take advantage of lower rates so she was still making those mortgage payments.


She is very frugal and creative, and has come up with a good retirement strategy for her situation.  Here's what she's done:

  1. Rents Out 2 Bedrooms - A smart woman she rents out the extra two bedrooms to other single seniors. This brings her in just over $1,000 a month. (Kind of reminds me of college roomies the way they look out for each other, yet mind their own business.)  
  2. Reverse Mortgage - Used the reverse mortgage to pay off the existing mortgage, saving her $600 a month in payments and setting up a growing line of credit (hey! you never know, one of the renters might move out - gotta be prepared)
  3. Works Part Time - Supplementing her savings for when she's a "real" senior, and needs extra help.
Between working part-time, eliminating her mortgage payment, and renting out a couple of rooms she has boosted her net income by $2,200 per month!  Pretty cool! 
 
Things to know - yes you can rent out a room if you have a reverse mortgage, but remember the home must remain YOUR primary residence too, and you must have full use of the living quarters in the home. In other words, you can't rent out the house and just live in your bedroom.
 
You do not have to make payments on a reverse mortgage, the interest just accrues to the balance.  The loan and all accrued interest becomes due and payable when you permanently leave the home. (Due to death, sale or illness)  If a reverse mortgage causes the home to be underwater, you or your heirs are not personally responsible for the balance. The lender's ONLY recourse is to the home - this is called a "non-recourse" loan.
 
I hope you enjoyed this post and learned a bit more about ways to use a reverse mortgage to help you structure a safe, secure retirement.  I hope you will post comments and questions.
 

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By Deborah Nance

NMLS#202003

Your Local Southern California Reverse Mortgage Professional

How Much Do You Qualify For?

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Equal Housing Lender

iReverse Home Loans, LLC, NMLS#810502 originates reverse mortgages in Alabama, Alaska, Arizona (MB-0919584), California, Colorado, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon (ML-5378), Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont (1164-MB), Virginia, Washington and Wisconsin. 

Important Information: Reverse Mortgages are neither "endorsed" nor "approved" by the Federal Government. The FHA (Federal Housing Administration) provides certain insurance benefits for lenders and borrowers in connection with the lender’s HECM loans; the FHA does not make or originate loans. The owner(s) retain title to the property that is the subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurance, maintenance and related taxes. Failing to pay these amounts or failure to maintain the condition of your property may cause the reverse mortgage loan to become due immediately. A reverse mortgage is a complex loan secured by your home. Whether such mortgage makes sense for you depends on your financial situation and needs. For these reasons, we strongly recommend that you consult with a qualified independent housing counselor, family members and other trusted advisers before making this decision. This website is not from HUD or FHA and was not approved by HUD or any government agency.

Comment balloon 1 commentDeborah Nance • November 28 2012 04:33PM
Redlands Reverse Mortgage Story
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It seems to be easy for folks to learn through stories, so I thought I'd post about a client in Redlands, California who just closed on her reverse mortgage A younger senior, in her late 60's, Ms. B husband passed away almost 10… more