A Realtor in Orem Utah, Harry Rodas, ran across a problem with which many of us are all to familiar.
He writes: "I was recently talking to a friend of mine who lives in my neighborhood. He and his wife are at retirement age and are living primarily off of social security. Their home is paid for with no mortgage on it. He was mentioning to me the need to re-shingle his roof and wondering how to pay for it. This friend of mine can live on social security except when large and unexpected repairs present themselves (like the roof). Living on such a fixed income can present a lot of challenges for senior citizens.
This issue is becoming a growing trend in Utah and around the nation. Seniors have different needs, issues and obstacles than any other segment of our society. That is one of the reasons that I decided to get the Seniors Real Estate Specialist (SRES) designation. It provides excellent training on issues unique to those in the 55+ age group.
My recommendation to my friend was to seriously consider a reverse mortgage. It is an excellent way for him (and others in a similar situation) to increase income without having to make any monthly payments on the loan. While I am fairly well versed on reverse mortgages, I always feel best when I turn to a mortgage expert. I asked my friend, Gaylon Ashby, ... to email me some information on reverse mortgages and I am including it below.
"A reverse mortgage€”either Fannie Mae's€™s Home Keeper® Mortgage or a HUD insured Home Equity Conversion Mortgage (HECM)–enables eligible homeowners to access the money they have built up as equity in their homes. They are designed to strengthen seniors€™ financial independence by providing funds without a monthly payment during their lifetime in the home. Seniors who are 62 years of age or older, owe less than about 50% of the value of their home, and will be living in the home will generally qualify for a reverse mortgage. The income that comes from a reverse mortgage is tax-free. And, the income may be received as a monthly amount, lump sum, or a combination of the two. Additionally, you Don't€™t have to repay any part of the loan as long as you occupy your home, pay your taxes and hazard insurance, and maintain the property.
When you leave your home permanently€”upon your death or when you move away€”your loan becomes due and payable. Your legal obligation to repay the loan can be no more than the market value of your home at the time you leave the property. So, the borrower (or his or her estate) will never owe more than the loan balance or the value of the property, whichever is less.
Reverse Mortgages are a proven and safe way for seniors to decrease expense, increase income, or create a source of funds to help them during the years that many have to live on fixed incomes. They are highly regulated and require that individuals considering a reverse mortgage to attend a class to better understand the programs and decisions they may make."
Gaylon hit the nail on the head, and Harry gave his readers accurate information by checking with a reverse mortgage professional.
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If you have questions of any kind about reverse mortgages here in West Michigan, it would be my pleasure to provide you with accurate information. Call toll free at 877-308-1489, or email me at j.noonan@comcast.net
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