Tag: Aging In Place

It’s Not Just a Boomer Issue

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

This is not a rant about profligate boomers and slacker Gen X kids, so hang with me here while I quote a couple statistics that are pretty scary: according to a Wells Fargo study out this month, 71% of Americans between the ages of 50 and 59 lack confidence they will have enough retirement savings to live comfortably during retirement, and 41% have no savings whatsoever.

The Wells survey, which has been conducted each of the past five years, added a new question this year, with 22% of respondents stating they would rather “die early” than run out of money in retirement.

The poll was not a sampling across all economic classes; rather, the median income was $63,000, well above the national average.

Why do I bring up these sobering statistics? Because they represent real people and indicate a real issue.

A conversation I had this week highlighted the issue in Technicolor terms: the adult daughter of a baby boomer said, “Every penny I could be saving for my own retirement is going to support my mother.”  This statement was not self-pitying, nor was it laced with bitterness. It was just a fact. And why hadn’t her mother saved better? There had been a late-in-life divorce, and the mother got the home but little else. She nows lives on Social Security, but every month there is a shortfall which the daughter makes up.

Joe Ready, director of Wells’ Institutional Retirement and Trust, is quoted in the Wells study as saying, “Saving for retirement isn’t easy. It requires sacrifice, and it’s not something people can push off and hope to achieve later in life. If people in their 20s, 30s or 40s aren’t saving today, they are losing the benefit of time compounding the value of their money. That growth can’t be made up later, so people have to commit early in life to make savings a regular discipline year after year – it is the only way most people will achieve their financial goals to carry them through retirement.”

I often read advice like this addressing spending habits and saving patterns – and saving more while spending less is always a good idea. But like I said, that’s not where I’m going with this. The truth often isn’t that straightforward. Many Americans have yet to financially recover from the Great Recession, and compounding the problem is the fact that many laid off in their 50’s and early 60’s were never rehired. Some had to tap into saving early, and others had to turn to adult children for support. It’s well and good to say one ought to have planned better. Sometimes life just isn’t that tidy.

In another conversation this week a 65-year-old, who is supporting his 90-year-old mother, said, “I never thought I would get to the point where $1,000 a month would be a big deal – but here I am.” He was, as were many of his age cohorts, laid off a few years ago and has not been able to find work since. His aged mother did save – for retirement. But now she’s funding longevity, a different matter altogether. Her retirement savings are long gone and she is dependent upon her son, who is caught in the classic “double draw-down”: he is burning through his savings much more quickly than planned because he didn’t work as long as he anticipated, and he is bankrolling his mother, whose expenses climb year after year.

In both these situations a reverse mortgage is going to pay off the existing “forward mortgage” and create a financial buffer.

There is still going to have to be self-discipline. They are still going to have to practice economy. That’s just the way it is. But that’s a far cry from lying awake nights worrying whether there is going to be money enough to meet monthly expenses.

As I’ve said many times, in retirement no one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA-insured reverse mortgage might help with your retirement plans or those of your loved ones, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [506562] is a freelance writer and Reverse Mortgage Consultant with Atlantic Coast Mortgage.

She can be reached at 703-477-1183 Direct or Laurie@MiddleburgReverse.com

How the “Back End” of a Reverse Mortgage Works

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage
Laurie MacNaughton and Neil Sweren © 2014

Realtors, home owners, and family members frequently have questions regarding how the “back-end” of a reverse mortgage (or HECM) works. The answer to the question depends upon whether the property with the reverse mortgage is underwater at the time the last person on title permanently vacates the home.

Selling the home if the house is NOT underwater

If the loan balance is less than the current property value, the sale is handled like any other home sale. There is nothing unusual about paying off a reverse mortgage with one exception: there are certain time constraints the lender MUST follow once the last person on title no longer occupies the home as his/her primary residence.

If the property is not underwater the reverse lender provides a written payoff statement. At closing, the loan balance is paid off – just as would be the case with any other mortgage.  After the loan is paid off, any and all remaining equity goes to the seller, which typically is the borrower’s heirs or estate.

Selling the home if the property IS underwater

If the loan balance exceeds the property value the process is a little different.

HECM payoffs are not negotiated like other short sales or short payoffs.  The lender must accept as satisfaction of the lien the first offer that is at least 95% of the home’s current appraised value.

HECM loans are non-recourse in nature, so the borrower and his/her estate CANNOT be held responsible for any shortfall.  This is true even if the borrower has millions in other assets.  The house repays what it can, and any shortfall is covered by the FHA insurance fund.

It is important to understand this is not a short sale, and that there is no negotiation required or permitted. The lender is prohibited by HUD from accepting less than 95% of the home’s appraised value.

What if the heirs want to keep the home?  

The lender does not care how the reverse mortgage is paid off, only that it is paid off. If the family desires to keep the property, the loan can be satisfied by refinancing or by paying off what’s due.

In an underwater situation, the 95% figure noted above holds true for family members who want to purchase the home: heirs can buy the home for 95% of the appraised property value – which is not the full loan amount.

Important note on time frames

It is important to note there are mandated time constraints placed upon the lender, and the clock starts ticking the day the last surviving borrower no longer occupies the property. Once the home is unoccupied, the borrower or his/her estate have six months to pay off the loan. In addition to the initial six months, up to two three-month extensions can be requested (for a total of one year) if more time is needed.

Extensions are not automatic; documentation that the home is listed for sale, a sale is pending, or that a family member is applying for financing on the home will be required in order for an extension to be granted.

Communication is key

The loan servicer should be contacted immediately once the home is vacant. Reverse mortgage servicers deal with “back-end” situations every day and help borrowers and family members through the process. However, they can’t help if they don’t hear from anyone. All reverse mortgage servicers send monthly loan statements to borrowers. Those statements contain all loan and contact information necessary to make contact with the lender.

If you have questions regarding an FHA-insured reverse mortgage, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [506562] is a freelance writer and Reverse Mortgage Consultant with Atlantic Coast Mortgage.

She can be reached at 703-477-1183 Direct or Laurie@MiddleburgReverse.com

Retired and Can’t Refi? You’re In Good Company

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage

Name Ben Bernanke ring a bell? As in the former chair of the Federal Reserve?

According to his own account when speaking to the moderator of a financial conference this past week in Chicago, Bernanke said, “Just between the two of us…I recently tried to refinance my mortgage and I was unsuccessful in doing so.”

“I’m not making that up,” he added when the audience laughed, his comment sounding vaguely like an homage to humorist Dave Barry.

And what was the conference Bernanke was addressing? None other than the National Investment Center for Seniors Housing and Care.

So that was October 2; fast-forward one day to October 3, 2014. I met with an aging homeowner and her adult son. The mother suffered an adverse health event and has had to quit her job. She is now struggling to make her monthly mortgage payment, and does not want to deplete her savings…only to be back in the same boat once savings are gone. Like Bernanke, she tried to refinance but was unsuccessful in doing so.

She considered selling her home, until she did the math and realized proceeds from the sale would not last as long as she’s hoping to.

A relative told her to look into reverse mortgage.

What does this accomplish?

  • One – never again does she have a monthly mortgage payment.
  • Two – she now has a cash buffer, in addition to other savings, as a rainy-day fund.
  • Three – she never has to move, unless she wants to.

Property taxes, if applicable, are still due, as is homeowners insurance, and routine home maintenance remains the homeowner’s responsibility – in other words, it’s still her home.

And even though the program has now been around decades, it still bears mentioning that the bank does not own the home. Title remains in the homeowner’s name. Or, to repeat myself – it’s still her home.

A reverse mortgage cannot fix all the challenges associated with aging. But a reverse mortgage can often fix one of the most vexing issues, namely financial insecurity as it relates to seniors’ housing.

As I’ve said many times, in retirement no one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA-insured reverse mortgage might help with your retirement plans or those of your loved ones, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [506562] is a freelance writer and Reverse Mortgage Consultant with Atlantic Coast Mortgage.

She can be reached at 703-477-1183 Direct or Laurie@MiddleburgReverse.com

Forward-thinking – In Reverse

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage

Some analogies are hard to miss. This week two events came together to create just such an obvious pairing.

The first element of the analogy was a piece in the New York Times. The article, with a title that at best sounds like damning with faint praise, is entitled “Love Them or Loathe Them, Reverse Mortgages Have a Place.” Ron Lieber, author of the piece, writes:

[Criticism is easy] when you have enough savings or pension and Social Security income to get by. But given that older Americans’ homes are worth, on average, more than their other combined savings, there is a begrudging inevitability about reverse mortgages. As more people enter retirement in the coming decades with modest savings and no private pension, they’re going to need some of that home equity back during their increasingly long lives. (Emphasis added)

Note what he’s saying: life expectancy has dramatically climbed. Pensions have gone away. Savings may be meager. But the one investment most Americans faithfully fund is their home. And they’re going to need to draw upon that investment in retirement.

Now enter element two of my hard-to-miss analogy: today I met with a delightful couple. Well educated professionals, within the next two years they would like to retire from their careers as contractors with the federal government. They moved to the area 16 years ago and still have 14 years to go on their conventional mortgage.

The math isn’t hard. Their monthly mortgage payment is going to lug their retirement finances. However, if they go into retirement without a monthly mortgage payment their retirement income, investments, savings, long-term care insurance and Social Security will likely be more than adequate to meet their current and future needs.

This couple is very typical of what I call my “Forward-thinking Reverse” clients. They are not in distress. They are not lacking options. They do not see a reverse mortgage as a miracle product. Rather, they have done their research, they have run the numbers, and they have carefully planned for their retirement years.

And part of this planning involves a reverse mortgage. “It’s only been in the past year we started to understand what reverse mortgage really was,” the husband told me.

Which leads me back to Lieber’s New York Times piece.

“Many of the people entering or examining the reverse mortgage business now describe their interest in [reverse mortgage] as a sort of conversion. …Michael Gordon, BNY Mellon’s head of retirement and strategic solutions…thinks that many retirees…are unaware of their true asset allocation. After all, their home equity is an asset too,” Lieber writes.

As I’ve said many times, in retirement no one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA-insured reverse mortgage might help with your retirement plans or those of your loved ones, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [506562] is a freelance writer and Reverse Mortgage Consultant with Southern Trust Mortgage.
She can be reached at 703-477-1183 Direct or Laurie@MiddleburgReverse.com

Reverse Mortgage : A bad idea whose time has come? Hardly.

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story, FHA HECM, Retirement Planning, Reverse Mortgage

By all accounts, my dad was a funny guy. Looking every bit the part of the aerospace engineer he was by profession, no one ever expected him to have a piercing sense of humor or the ability to capture just the right turn of phrase – but he had both, and his humor was often profound.

One funny phrase he used occasionally was “a bad idea whose time has come.” He did not say this often, but an example of something fitting into this category might have been the Stuxnet software worm, if he had lived long enough to see it.

So why in the world do I bring this up?

This past week I received a call from a private wealth advisor who referred a client. While on the phone the wealth advisor said, “I always thought a reverse mortgage was a bad option people turned to when they were desperate. But during this month’s advisors’ meeting, reverse mortgage was suggested as a potential element of a well-rounded, long-range retirement plan.”

Bingo, my friend.

And more than ever, right now there are truly profound reasons to consider a reverse mortgage.

First is this: few financial experts anticipate interest rates will stay low. With a reverse mortgage, there is not a monthly mortgage payment, so that’s not how rates figure in. However, interest rates impact how much money the client receives – and even a small rate increase negatively impacts how much money the homeowner can access. In fact, if rates go up to 4.06% – which for much of history would be a modest rate – there would be a 26% drop in funds available to someone aged 68. That’s a hefty reduction.

A second consideration is that a reverse mortgage may enable a senior to delay drawing Social Security until age 70, when benefits are maximized. Most of us have seen the charts and know how much money we walk away from if we start drawing benefits at 62; less well-known are strategies available to help avoid an early draw.

A third thing to consider is this: there is an automatic growth rate associated with a reverse mortgage line of credit. This, in my opinion, is the least-known element of a reverse mortgage – and that’s a darn shame.

Each month, the unused portion of a reverse mortgage credit line grows bigger. This means that if you establish a line of credit now and let it sit until you need it, month over month the credit line will be bigger than it was when you originated.

Right now, more than ever, a reverse mortgage is a good option – whose time has come.

As I’ve said many times, no one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA-insured reverse mortgage might help with your retirement plans, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS# 506562] is a freelance writer and a Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183, or Laurie@MiddleburgReverse.com

 

Weekly Scenario

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story
Steven E. Shane, Esq. | © 2014 Offit Kurman, Attorneys At Law | Used by permission                                

Question:  My son lives across the country but is my health care agent.  He has a copy of my advance medical directive.  I’m concerned that if I am admitted to the hospital suddenly, or there is a medical crisis, he may not be able to quickly deal with the situation.

Answer:  An advance medical directive gives instructions as to the type of medical care you would like to receive in the event you cannot express those wishes yourself.  The document can also give another person the ability to make medical decisions for you.

The document, however, is not helpful if it is locked away at the bank or in your attorney’s office.  One solution [for dealing with this problem] is with a new app called “My Health Care Wishes.” This app allows one to import and store important health care documents on a smartphone so they are accessible when needed.

So in this scenario, your son could keep the information on his smartphone.  If there were an emergency, you would have a “My Health Care Wishes” wallet card stating your son has your medical proxy documents.  He would access and send that document quickly, and then have the authority to speak with the medical facility and make decisions.

Two other apps available are DocuBank and MyDirectives.  I have also seen articles which advise using a phone or tablet to simply store documents in a cloud-based storage system.

Comment:  One issue to be wary of is the security of these legal documents.  My hope is that these apps have worked on the security issues, but I can’t comment on whether that has actually taken place.

As always, if you have any questions or would like to learn more, please let me know.

Steven E. Shane                                            
Principal Attorney                                              
Offit│Kurman®
Attorneys At Law

www.offitkurman.com
8171 Maple Lawn Blvd. | Suite 200 | Maple Lawn, MD 20759 | 301.575.0300

 

Please note the above material discussed is intended to provide only general information.  Do not, under any circumstances, solely rely on this information as legal advice. Legal matters are often complicated.  For assistance with your specific legal problem or inquiry please contact me directly.

Low Interest Rates, Low Inventory, and a Slow Market? Huh?

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

Laurie MacNaughton [NMLS# 506562]

Low interest rates, low housing inventory, and a slow housing market? In what kind of crazy world do these three conditions exist simultaneously?

At last week’s 2014 Finance Summit, hosted by Northern Virginia Association of Realtors (NVAR), Joseph Minarik, research director for the Office of Management and Budget, explained how we got where we are.

According to Minarik, interest rates have been so very low for so very long most people who were going to refinance have done so. Additionally, some buyers moved up their home purchase to take advantage of historically low rates. So in effect, very low rates caused the market to borrow homebuyers from the future. Now rates have edged up slightly, and homeowners are loath to purchase a new home and forfeit their low rate. This not only impacts the sale of previously owned homes, but since fewer people are willing to move, it also impacts new home starts.

And how has this impacted the housing market? Basically since the middle of 2013, the pace of home purchases has been stalled. This includes new home starts.

But there was good news out this week: for the first time all year, April’s home sales were up.

Several factors have come together to create a better housing market, according to Steve Farbstein, Chairman of the Mortgage Executives Committee of Virginia Bankers Association. One such factor is the loosening of lending standards by some lenders. Additionally, certain loan products that had been unavailable have started to reappear, giving borrowers with unusual circumstances a better chance of qualifying.

Though a loosening of lending standards may help homebuyers who are in their working years, many senior homebuyers still cannot qualify for a traditional loan. Often this is not because they have adverse credit issues. Rather, it can be next to impossible to get a loan if the applicant is not actively employed.

But here’s the thing: it’s not that seniors are unemployed. They’re retired. But either way, in many cases they’re still not getting that loan – and as a reverse mortgage specialist, it’s the retired, or those who are planning to retire soon, I’m concerned about.

There actually is a purchase loan just for seniors. It’s called the HECM for Purchase loan, and it was designed specifically with seniors’ needs in mind. With the FHA HECM for Purchase there is a down payment, but there is never a monthly mortgage payment due. And, though guidelines will soon tighten, as of right now qualifying for a HECM for Purchase loan is based upon the borrower’s age and the purchase price of the home. Also, in many cases it’s ok if there is still an “exit” home that has not yet sold. This gives seniors time to make any necessary repairs or upgrades to the “exit” property after they have moved into their new home.

The housing market is starting to budge, and there is no reason seniors should be left behind. Now while rates are low it’s a great time for seniors to get into a home configured to suit their needs in retirement.

Give me a call and let’s talk. I always love hearing from you.

Laurie

Laurie MacNaughton[NMLS# 506562] is a freelance writer and a Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183 Direct, or Laurie@MiddleburgReverse.com

 

 

 

Weekly Scenario

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

Question:

My wife and I recently looked into doing a reverse mortgage, but were told we don’t qualify for enough to pay off our existing mortgage. Do we have any options?

Answer:

This situation is called “short to close,” and it refers to the exact scenario you are encountering, namely one in which your current “forward” mortgage is too large to be paid off by the proceeds from the reverse mortgage.

You do still have options. The most common solution is to bring money to closing to cover the shortfall.

Here’s an example in real numbers:

John and Dianne are each 64, and their plan is to retire within the next 6 months. Their home is appraised at $400,000, and they owe $203,000 on their current mortgage.

Assuming current interest rates and average closing costs, the amount they qualify for leaves them about $5,000 short of what they need in order to fully pay off their forward mortgage.

They are allowed to bring that $5,000 to closing in order to make the reverse mortgage work. The funds to cover the shortfall can come from any non-loan source, including savings, sale of an asset, or a gift from adult children.

And what is the benefit of doing this? The obvious benefit is that they have no more monthly mortgage payment. Since most Americans’ largest monthly expense is their mortgage payment, eliminating that expense frees up a significant amount of money on a monthly basis.

But there are side benefits as well, including safeguarding the home in the event one spouse dies and the surviving spouse loses the retirement income generated by the late spouse. Even with the loss of income, no payment on the loan is due until the last person on the home title moves, sells the home, or dies. At that point the heirs have up to one year to decide whether to sell or to refinance the home.

If you have reverse mortgage questions, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [NMLS# 506562] is freelance writer and Reverse Mortgage Consultant with Middleburg Mortgage. She can be reached at 703-477-1183, Direct, or at Laurie@MiddleburgReverse.com
 

Middleburg Mortgage ∙ 8190 Stonewall Shops Square ∙ Gainesville, VA ∙ 703-477-1183 Direct Laurie@MiddleburgReverse.com ∙ www.MiddleburgReverseLady.com

 

Approaching High Tide

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story

So here’s a nifty term I learned this week: “Dependency Ratio.”

This term appears in this month’s U.S. Census Report entitled The Baby Boom Cohort in the United States: 2012 to 2060, and it measures the youngest and oldest members of the population relative to the number of those of working age. The smaller the dependency ratio the better. Or, turning the equation the other way around, the larger the dependency ratio, the worse it is for the economy.

And why?

Because workers work – and workers earn. Dependents, on the other hand, depend on earners. That’s why they’re called “dependents.”

And who are these dependents? They are both the young and the old – those who have not yet entered the workforce, and those who have retired from it. In fact, the dependency ratio is split into two segments, the “youth dependency ratio” and the “old-age dependency ratio.”

According to the U.S. Census Bureau, the youth dependency ratio topped out in 1964, when there were 67 children for every 100 working adults. By 1999, when boomers were in their peak earning years, the dependency ratio was under 37, its all-time low.

The Rising Tide

Old-age dependency ratios are also a function of the baby boom. In 1945 there were 12 older Americans for every 100 workers; by 2010 there were 21. By 2030 the combined dependency ratio will hit high tide, when it is projected to top 75.

Need I say it? That’s a lot of dependents.

And here’s the thing about dependency: in 15 years, 15-year-olds will be 30. With any luck at all they will be working, living on their own, furnishing their own homes or apartments, and entering their peak purchasing years. They will also be healthy.

Contrast this with 65-year-olds. In 15 years they will be 80. Typical 80-year-olds are not working, not buying new homes, and not buying new goods at the pace they once did. Furthermore, few 80-year-olds are healthier than they were a decade and a half earlier.

By 2030, the last of the baby boom cohort will have turned 65. In that same year 1 in 5 Americans will be 65 or older. An historically large old-age ratio will increase old-age dependency – and is likely to squeeze government agencies and families alike as they attempt to meet the needs of the elderly.

We’re all making this up as we go: never before have we or our parents, never before has the nation, or indeed the world, faced this dynamic. It’s going to take creative solutions, combined efforts, and flexible options to meet the needs of those we love.

Laurie

Laurie MacNaughton is a freelance writer and a Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183 Direct or Laurie@MiddleburgReverse.com

 

Laurie MacNaughton [NMLS# 506562] ∙ Reverse Mortgage Consultant, President’s Club ∙ Middleburg Mortgage ∙ 8190 Stonewall Shops Square ∙ Gainesville, VA 20155 ∙ 703-477-1183 Direct ∙ Laurie@MiddleburgReverse.com∙ www.MiddleburgReverseLady.com

And the WINNER for Most Embarrassing Is…

by ReverseLady, posted in Caring for Aging Parents; A Daughter's Story
What would be the most embarrassing thing for you to admit? Your weight? Your age? Your bank balance?
For most Americans, it’s none of these. It’s their credit score.

According to a new poll conducted by National Foundation for Credit Counseling, 37% of respondents nationwide indicate the element of their life they would least like divulged is their credit score. Next on the list of embarrassing secrets? Credit card debt.

That these two go together really shouldn’t come as any surprise, as they are often closely linked.

How Credit Scores Work

Credit card debt is one of the most highly-weighted factors in credit scores, and it works like this: think of a jar. That jar represents the limit on your credit card. When the jar is full, you have hit the max on your card. You have filled your jar with debt – and that’s not good. In fact, if your jar is more than 30% full of debt, you will start to see it significantly impact your credit score. And no one needs to tell you it’s hard to dig out from under credit card debt.

Good Advice Gone Bad

Many seniors have credit card debt. There’s no question about that. And many seniors are having a hard time managing that debt – there’s no question about that, either.

But here’s the place I think a lot of financial advice gets wacky – almost mean. When you ask seniors how they accrued so much debt, the answers rarely include lavish expenditures, exotic travel, or irresponsible habits. Rather, most tell stories of illness, unexpected home or auto repairs, or assistance to distressed family members. Often I work with leading-edge boomers taking care of advanced-elderly parents, causing a double draw-down on retirement savings. To preach a gospel of austerity to a widow struggling to pay off her husband’s final illness goes beyond uninformed thoughtlessness; this is rank insensitivity bordering on cruelty.

What are the Options?

In retirement, options often become limited by health, skill set, and available employment. Selling the home and moving in with family is indeed an option, and for some it is a good option. Selling the home and renting is not currently a good option for many, as rents are at historic highs. “Forward,” or traditional, lines of credit can, in certain cases, make sense. However, with a forward line of credit, the homeowner acquires yet another monthly payment, which renders the loan of dubious assistance.

For many, the way forward is going to include a many-faceted solution set, including a reverse mortgage. With a reverse mortgage, one of the potential options includes a line of credit that can be drawn against in emergencies, and which does not require a monthly repayment. The debt is repaid when the last person on title to the home permanently leaves the home.

No one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA reverse mortgage might help with your retirement plans, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton is a freelance writer and a Reverse Mortgage Consultant at Middleburg Mortgage. She can be reached at: 703-477-1183 Direct or Laurie@MiddleburgReverse.com

 

Laurie MacNaughton [NMLS# 506562] ∙ Reverse Mortgage Consultant, President’s Club ∙ Middleburg Mortgage ∙ 8190 Stonewall Shops Square ∙ Gainesville, VA 20155 ∙ 703-477-1183 Direct ∙ Laurie@MiddleburgReverse.com∙ www.MiddleburgReverseLady.com