When one retires, they were not aware what would be required 20 years prior when they were saving their money for retirement. For that reason, many homeowners over the age of 62 are suffering. Being house-rich and cash-poor can equate to a stressful retirement. This story is about my uncle.
With the standard cost of living constantly on the rise with no signs of slowing down, those who budgeted for a slight increase int he cost of living are now forced to face reality. This blog post is dedicated to a retiree who used a reverse mortgage in Florida to make their situation more feasible.
Florida reverse mortgages are on the rise with the recent comeback from the housing market. In just 2012, those who were house-rich and cash-poor did not wish to do anything with the ultra-low valuations their homes were fetching. One retiree in particular decided to wait it out and suffer with a low monthly income just barely getting by.
The housing bubble is now over and the housing market has recovered and home prices are on the increase. The retiree decided to take decisive action and do something about his situation. After realizing he could do a traditional refinance he was relieved. However, the monthly mortgage payment and interest would put him in a worst position. He would have a lump sum of cash but that would soon run out.
Enter the reverse mortgage. He spoke with a company called Shop Reverse Mortgages
based out of Florida. Very shortly after, he was advised that he could take out some of the equity in the home without having to pay a monthly mortgage payment or interest payment. My uncle felt like it was to good to be true. However it wasn't. He asked me to help research this financial product. It ended up being insured by the federal government.
This made me feel "safe" about this transaction. After everything that has been happening to scams, it felt good knowing the federal government stepped in to make sure seniors like my uncle wouldn't get taken advantage of.
I also learned his entitlement programs like Medicare & Social Security would not be impacted. The logic is because it is not earned income, rather just unlocking home equity. So the money is treated differently than if my uncle was earning an income from a job.
There was other benefits that I cannot remember but all in all I am very happy this reverse mortgage helped my uncle so much. He received a large lump sum of money and has no mortgage payment as promised. If our family wants the house after he passes away, we just need to pay off the loan or else the bank keeps the home. We decided it was more important for him to live a stress free life rather than be greedy and keep the home after he passes away.
I hope my experience helping my uncle can help someone else.
Posted at 06:49 pm by reversemtg