It’s a great question and I’m glad you asked it. I think the best way to answer is to give you some examples of a few of my personal clients. I won’t give you their names, just their stories in a nutshell. You may find a situation similar to yours.
Buy A Home - Baby Boomers (63 & 68) from LA sold their home in San Gabriel Valley to move to the Inland Empire and be closer to their family. Using a HECM for Purchase they bought a single story newer home in a 55+ community. The HECM For Purchase allowed them to finance part of the purchase rather than paying “all cash”. This allowed them to make a sizeable deposit to their retirement and still have no monthly mortgage payment.
Payoff Mortgage - Divorced boomer, she got the house and the mortgage! She used the reverse to payoff the current mortgage and established a line of credit for future emergencies...
Pay for Home Care - Elderly widower, he and his financial advisor planned for a nice long life of till 85 or so, but he kept on going. After he ran out of retirement income, his advisor recomennded a home equity loan, so he did that. He just kept on going, and going, and maxed out the equity line and could not afford his in home care provider. The reverse mortgage paid off the equity line, provided monthly funds for life to pay caregiver AND of course no payment on the loan improved his cash flow position. 100 years old and going strong!
Supplement Income - Young 75 year old, living on social security and small pension, home is paid for but cost keep rising (gas, water, heat, A/C) not to mention insurance, healthcare co-pays.... it all just nipped away at her income. She got a reverse mortgage and split up the benefit into monthly tenure payment for life and a line of credit for emergencies. Now she has extra money each month and a way to handle the big stuff too. (Her son helped her to strategize on how to structure her reverse.)
I’m sure you can think of many “why’s” when a reverse could be a good idea for you or a loved one. And, there are reasons when a reverse is not a good idea - some of those are.
You are planning to sell in the next 5 years.
You live in a multi-generational home.
Your spouse is not 62 years of age, yet.
You don’t have any cash flow problems.
Getting a reverse mortgage is a decision not to be made lightly. If at all possible please involve your family and financial advisors in the process as they can have some valuable input with solutions, ideas and questions you may not have thought of.
By Deborah Nance
Your Local Southern California Reverse Mortgage Professional
Click the Learn More Button below to email me a question.
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.