Grandpa (who just turned 80) calls you up and says he thinks their roof might be leaking and they don’t know what to do. You go over to their house to check it out and find that the roof is indeed leaking and there are a lot of other serious repair issues with the house. They can’t afford any extra expenses and are already stretching their monthly budget to make ends meet. In addition to the many needed repairs, the home is not suitable for aging in. What do you do?
Suggest they sell the home they have lived in for 50 years and move?
- Buy a new home with Cash- (House rich, Cash poor)
- Keep some of the cash from the sale of the previous home and use the rest for a down payment on a new home with a mortgage.- (might be hard to qualify for a new loan and they can’t afford a monthly payment)
- Buy a new home with a reverse mortgage, keep some of the proceeds from the sale of the other home and live without a monthly mortgage payment. (money in savings and no monthly mortgage payment)
Suggest they find a way to pay to fix up the home?
- Get a home equity loan
- Put the repairs on a credit card
- Borrow money from family or friends
- Take out a reverse mortgage line of credit that they could access anytime for any reason and never have to make a monthly payment on. Interest only accrues on the amounts that are borrowed and each year they get older, more money becomes available for them to access.
As you can infer, all the traditional options are less than ideal for G-ma and G-pa. They can not afford any additional expenses and qualifying for traditional financing might not be feasible on a limited, fixed income.
So, What are Grandma and Grandpa to do? The best option for them is one that will allow them to live comfortably in retirement. Whether they want to stay in the home or buy a new one, the reverse mortgage product will allow them to re-envision retirement, re-invent their space and live out their days with a more secure future. Re-think retirement with a reverse mortgage.