REVERSE MORTGAGE USES
Extra Needed Income
The Need: A 75 year old widow has a $12,000 annual income from Social Security and pension benefits. Although this was sufficient income initially, over the years some unexpected expenses have caused her to cut back on some essentials and pay for other items on credit cards. She would like to pay off her credit card bills that have grown due to her income not meeting her monthly expenses.
Solution: With a reverse mortgage, she would be able to receive additional monthly income without incurring additional mortgage payments or putting her house on the market. Her $450,000 home could generate a total benefit of $277,833 resulting in a monthly income of $1,524.
End Result: The additional income would allow her to pay off her credit cards and have, for example, new carpet installed in her home. She would even be able to afford to visit her grandchildren in Florida.
Medical Expenses
The Need:A couple in their mid-seventies is enjoying their retirement, when unexpectedly the husband suffers a major stroke. fortunately, he survives but requires very costly 24-hour in-home care. With little extra in their savings, his wife faces the possibility of having to put her husband in a skilled nursing facility or being forced to spend down their savings to qualify for Medicaid.
Solution: Using a reverse mortgage, they could access the equity from their $650,000 home. They could convert this equity into $90,000 per year of tax-free cash, without assuming payments or giving up their home.
End Result: From a line of credit, the wife would be able to pay the $4,000 a month for in-home care and would not have to sell their home or put her husband in a skilled nursing facility.
Home Improvement
The Need: A 76 year old hunband and his 74 year old wife bought their retirement home in Las Vegas and have lived there for 9 years. Their combined income is $22,000 annually from Social Security and pension benefits. this is sufficient income to cover their expenses and a few extras, but now the house needs some major work. The air conditioning needs to be replaced and there is a major plumbing problem involving repiping the house. Their credit is average but they do not like the prospect of incurring additional credit card debt and the extra monthly payments.
Solution: With a reverse mortgage, they would be able to receive the money they needed without incurring additional payments. Their $375,000 home could generate a benefit amount of $167,000 to pay for their repairs.
End Result: the money from the reverse mortgage would allow them to pay for ttheir repoaris, take a cruise to Bermuda and leave $100,000 in their line of credit for future emergencies.
