Using a Reverse Mortgage to Supplement Income

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Mortgage and Lending with Orange County, Corona, Riverside, Los Angeles NMLS#203003

Just closed a reverse mortgage loan for a homeowner here in Corona for a healthy, vibrant  and young looking widow who owned her home free and clear. She lives in a beautiful single story newer home in Trilogy, a gated 55+ resort community.  Her beautiful home was designed for “aging in place”.  My clients monthly expenses were digging into her savings to the tune of about $700 each month and she could see her nest egg shrinking away. It would be completely gone in under 5 years!  The current low interest rates weren’t helping either.  She was sceptical at first about getting a reverse mortgage having heard some of the common misconceptions, but was interested to see what I had to say about it.  


After I reviewd the new HECM Saver reverse mortgage with her, she saw that not only was the loan very inexpensive, but that she could preserve her savings (an asset that would grow) and instead, start tapping into her home (an asset that recently hasn’t done so well).  Her closing costs were less than $2,000, and she will be recieving a $750.00 tax free loan disbursement every month for the rest of her life (as long as she lives in the home.)  The beauty of this is that she is only borrowing $750.00 per month instead of the entire amount she qualifies for, preserving her home equity far better than if she had taken a lump sum from the reverse mortgage.

Her son was very supportive of her decision to get a reverse mortgage and understands that when he inherits the home, he will have 6 months (possibly even a year) to payoff the reverse mortgage. He says he will just sell the home and keep the change. Since my client is only taking $750.00 per month it is very unlikely that she will ever be “underwater” on her reverse mortgage and should pass on some equity dollars as well as her savings to her son.  In the meantime, he does not have to worry about his mother running out of money and can better plan for his own retirement.

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By Deborah Nance

Your Local Southern California Reverse Mortgage Professional

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Topic:
Lending / Financial
Location:
California Riverside County Corona Trilogy
Groups:
communities for those 55 and better
Mortgages
Seniors Issues
We Are Women!
Tags:
reverse mortgage information

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