Guest Post by Doni Dolfinger
Have you ever worried about staying in your home for as long as possible? Have you ever worried about paying the bills? Have you been more than a little intrigued by the advertisements for reverse mortgages? Let me share with you one story, which made it all possible.
Mr. Good (not his real name) enjoys living in the picturesque mountain home he had built in 2007. His plan was to live his retirement years in the beautiful Rocky Mountains where he could take advantage of the laid back lifestyle.
With recent health issues, a hospital stay, and mounting medical bills, he found his easy lifestyle interrupted with concern that he might have to sell and move in order to pay his bills and cover the cost of additional care that he now requires.
Mr. Good discussed his financial options with family members and his attorney. The solution they opted for was an FHA Insured Reverse Mortgage also known as the Home Equity Conversion Mortgage or HECM. The reverse mortgage program allows homeowners 62 plus to borrow some of the money from their home without a required mortgage payment. Instead of making payments he can how have payments made to him to cover his expenses.
The reverse mortgage may be set up to disburse funds monthly, as an initial draw, as a line of credit, or combination. Mr. Good’s free and clear mountain home appraised for $338,000. Based on his age of 78, the value of the home and the interest rates at the time he secured his loan, he qualified for over $210,000. He chose to receive $3,000 a month for three years, $30,000 initial draw to pay off his medical bills, and left $81,000 in a line of credit he may use anytime for any reason. [Read more…]