Reverse Mortgages are at the top of the list of misunderstood financial products. It’s truly regrettable, as there exist numerous homeowners, particularly those aged 62 and older, who stand to gain by unlocking the financial security, peace of mind, and freedom nestled within the walls of their homes. The reality is that these financial instruments are well-regulated and, for the right borrower, can be a safe and strategic resource. For most Americans, the equity in one’s home is their largest asset. It is like a giant piggy bank where each month deposits have been made. On top of that, it’s an example of inflation working in one’s favor!
Let’s look at the case of Mary and Don:
Mary’s husband Don handled the finances for their family and did a great job. He accumulated a significant retirement account, his Social Security check paid most of the bills and they had a comfortable and happy life together. Their children and families lived close by and had enough financial resources to take care of themselves, but not much to spare.
When Don passed, Mary realized that their retirement nest egg had shrunk substantially. The Social Security check seemed much smaller now, and with the cost of food and everything else so much higher, Mary felt her stomach tighten with worry. On top of that, her roof leaked and needed replacing – in fact, her entire house could use a paint job after all these years of neglect. Suddenly the future on her own didn’t seem quite so bright anymore. Thankfully, Mary’s home had been paid off from years of monthly “forced savings.” She had a tremendous resource to tap into and with the suggestion of a family friend, she made one telephone call that would change her life.
Mary didn’t want to make the call. She felt nervous and uncertain, but her anxiety over her finances and the reassuring words of her friend overcame her reluctance. The loan officer listened to Mary’s story. He had heard it before – a lot. He was able to give Mary that glimmer of hope that she was doing the right thing, that she had a solution that was so easy right at her fingertips. Mary scheduled a counseling appointment and discussed the matter in depth with her children. In the end, after careful consideration, everyone agreed that this was the best decision and solution ever!
Mary wants to leave her home to her children and her reverse mortgage won’t prevent it. A reverse mortgage is just a loan where monthly mortgage payments don’t have to be paid. The interest is deferred until the loan is paid off by refinancing or selling the home. The bank does not own the home, and her children will still retain all the remaining equity in the property.
Reverse mortgages offer a safety net and can be used for any number of purposes. Their financial flexibility is particularly valuable for those seeking to maintain independence and cover unforeseen expenses during retirement. It could enable aging in place with in-home health care, home repair or modifications for accessibility, pay for unexpected medical expenses, or travel. The absence of monthly mortgage payments further contributes to reducing financial stress, allowing retirees to focus on enjoying their golden years.
So many people live a compromised lifestyle, often suffering needlessly, when the solution to their hardships is literally under their feet! A reverse mortgage will not only preserve the emotional attachment to one’s home but also ensures continuity in a familiar and cherished environment.
Craig Greene is your premier mortgage specialist in Santa Barbara. He offers some of the most competitive rates nationwide, and makes the loan process simple, straightforward and fast. Whether you are a first-time home buyer, purchasing your dream home, or a home owner considering a reverse mortgage, Craig can help you take that first step toward a financial solution. He can be reached at cgreene@c2financial.com or by phone at (805) 451-5301.
