Besides the fact that reverse mortgages are backed by HUD, and that they are considered entitlements by the government, people still bad mouth the product. Its time to consider some individual cases to determine what a reverse mortgage really does for a senior.
A 70 year old senior citizen is living on a fixed income of $1200 per month.
Two months ago they were just prescribed medicine by their doctor that costs $300 per month.
They own their home, but their savings has been dwindled over the years so they really do not have much to draw on to pay for living expenses or for the new prescription.
Their options are :
1) Skimp on food, skip all forms of entertainment or "going out", and try their best to live on $900 per month.
2) Get a $100,000 mortgage on their home, with monthly payments of $890 a month.
3) Get a reverse mortgage on their home, and get $61,000 in cash (or a credit line that grows over time), and get to live in their home for the rest of their life.
The government wants you to live in your home for as long as you can. The cost of assisted living outside the home is extremely expensive. If the senior got a forward mortgage for $100,000 there is a risk that they would default on the loan and be faced with a very bad future.
Are you starting to see the benefits of a reverse mortgage?
(More case studies to come)
Bob
Bob@az62.com
www.az62.com
623-214-6663
No comments:
Post a Comment