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Should Your Parents Consider a Reverse Mortgage?  A Real Life Example

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A reverse mortgage is an excellent financial option for those with a significant amount of equity in their house.  It allows the homeowner to leverage that equity and receive payments from the bank.  These payments can often provide a much needed injection of cash that can literally change lives.  But what happens when the homeowners aren’t even aware of this option?

I’m writing today’s blog post based on an email I received from a reader.  This reader had parents that were struggling financially in retirement.  They were living month to month, and definitely not enjoying the quality of life they’d imagined.  In this case, it was their son who initiated the discussion about a reverse mortgage.  

The homeowners both met all of the qualifications for a reverse mortgage: 

  • 55 years old (or older)
  • Significant equity in the home
  • Home was their primary residence
  • Homeowners were able to maintain the property
  • Up to date on property taxes and homeowners insurance

What’s great about this example is that this couple’s son recognized that his parents could really benefit from this type of loan.  That’s because with a reverse mortgage, the borrowers receive payments from the bank.  They have the option to receive the payments in a few different ways:

  1. Fixed payments over a set term
  2. Fixed payments for tenure (ongoing)
  3. A lump sum
  4. As a line of credit (can be drawn as needed)
  5. A combination of the options above

Ultimately, this reader’s parents decided to work with Equity Access Group on a reverse mortgage.  They were able to borrow $1,000,000 to meet their financial needs in retirement.  This significantly improved their quality of life, and their stress levels.  Worrying about money month to month was a thing of the past.  This couple now had the freedom to enjoy the retirement they’d imagined.

If you are reading this and have parents in a similar situation, it might be worth having the discussion about a reverse mortgage.  You’ll want to read this blog post about what happens when a reverse mortgage becomes due and payable as well

Besides doing a little homework on my blog about reverse mortgages, I’d definitely suggest calling a professional.  The team at Equity Access Group specializes in reverse mortgages, and they will help you learn if this is right for you (or your parents).  

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