The New Reverse Mortgage when life throws you a curveball

When life throws you a curveball it’s the opportunity of a lifetime to hit it out of the park!

John and Linda were like most retirement couples, they wanted to see if a Reverse Mortgage fit into their retirement plans. John was 70 and Linda had just turned 68.


life throws a curveball

John had worked for the same company for almost 30 years and they had managed to save about $100,000 in his 401(k). Aside from the occasional part time work, Linda had been a stay at home mom raising their three children. They’d lived in their Orange County home for more than 20 years and loved their home and the senior community where it was located.

Related: Using your home to stay at home

When we met I asked about their retirement concerns and they were worried they would outlive their savings. Because they had a great deal of equity built up in their home we found a reverse mortgage program that would not only pay off their existing mortgage which would save them $1300 a month  but also give them a line of credit for those unexpected “life events” that could derail their retirement.

Related: Having the dreaded “M” word discussion with your family

Before they decided, they wanted their kids to be part of the decision making process, so at our next meeting I explained to the two kids present how the program would work and the “safety net” it would provide their parents in the event something unforeseen occurred. The kids saw the value and agreed it was the right thing to do. However the youngest son was 100% against the program and refused to participate in any of the consultations. The term he used was “scam”.

Not wanting to upset the family dynamic, John and Linda decided to pass on the Reverse Mortgage for the time being in the hope they could get their son “on board”

Related: Is there too much month left at the end of your money?

A few months later I reached out to them to see if I could help.Unfortunately John had passed away from a massive heart attack and he left behind some medical expenses not covered by his health insurance.

Linda now had a home she couldn’t afford along with unpaid medical bills. To further complicate matters Linda was now only entitled to fifty percent of John’s SSI, which created a severe monthly cash flow problem for her. Unless she found a solution quickly Linda knew she was staring at rebuilding a new life in another home and the community she had come to love.

Linda knocks the curveball out of the park

Linda was finally ready to sit down and find a solution that would allow her to stay in her home and community. The kids all realized that this was the solution their mother needed to give her the peace of mind to enjoy the rest of her retirement.

Linda’s new retirement plan

Home Value Rev Mtg Mo. Pmt* Bills paid off Line of credit Equity Reserve
$600,000 $271,000 $0 $25,000 $76,000 $340,000
All figures are approximate and are for demonstration purposes only
* Homeowner responsible for payment of property taxes, homeowner's insurance and to maintain property

The New Reverse Mortgage isn’t for everyone…but it could be!

If you’re still wondering if a Reverse Mortgage is the right solution for you but you’re not ready to sit down with one of our Reverse Mortgage Experts, then we’ll be happy to mail (or email) you Use Your Home to Stay at Home which is the official federally approved consumer booklet for those considering a reverse mortgage.

From the desk of Greg Cook; 951.265.4532​