I recently was thinking about older. I just had my birthday. I was on a company-wide production trip and in a room of top mortgage professionals when I realized I was one of the older people in the room. Wow! Where has time gone? I remember having to wear a business suit every day so clients would take me seriously. Now, here I am walking down a hall to a meeting talking to a guy who was almost half my age.
So what does all this have to do with a reverse mortgage? I do not look at retirement as quitting my job and sitting in my rocking chair waiting to shuffle off this mortal coil. I love what I do and would most likely never quit willingly. But there are a lot of things that I want to do while I continue to do the work I love. I’m lucky to be a homeowner in southern California because I have an incredible amount of equity in my home. But equity in a home doesn’t really bring much value to the current life style of our family. Let’s explore a few ideas that one can use a reverse mortgage for and reasons why that is.
1. We have been thinking of a second home in the mountains.
But having a mortgage payment for our home and then a mortgage payment on a second home would be too much stress. Why have a second home if you must work a lot more in order to afford it? Would you have enough time to enjoy the second home? Life at a certain point should be about creating everlasting memories with family and friends. With a reverse mortgage I can free up monthly income on our primary residence and make a payment on a second home in the mountains.
2. My wife is a world travelerand for as long as I have known her, she has talked to me about the places she wants to take me to.
Something always comes up and we always end up traveling to the same places we have been to. Why? Because we can do it in a week and it’s easy planning and budgeting. The extra cash flow from a reverse mortgage would nudge us into traveling to these other destinations.
3. We have been living in our home quite a long time.
It’s a nice home but it sure can use an update. I need to also consider a day when it is just going to be harder to do the things I take for granted today. A contractor I know is very busy with something he calls aging in place. So, as I give this serious thought, it brings up a lot of other conversations with myself: Where do I want to be in my last years? I have been to many convalescence homes over the years and I would rather stay put in my own home. A remodel with future needs can be paid for with a reverse mortgage.
4. The phrase “Social Security” keeps popping up in my thoughts.
After all I have been paying into it since I was 15. But should I start at age 62 or should I postpone a while? Every year I postpone collecting on Social Security, my benefit increases until age 70. Well if I do not have a mortgage payment, would it not be the same as an income, but with no tax consequence?
5. The fact of the matter is, if you have a mortgage you are required to make those payments.
If for any reason you cannot make that payment, no matter how much equity you have in your home, a lender can foreclose and remove you from your home, no matter how many payments you have made over the years. With a reverse mortgage you get peace of mind. There is no monthly payment ever due. No one can remove you from your home for non-payment. Title to the home always remains in your name. The lender can’t collect on a reverse mortgage until you or your estate sells your home.
Just a few ideas, there are many more. My suggestion is to spend some time thinking about what it is you really want in your last quarter of your life. I am not saying a reverse mortgage is for everyone, but I believe a reverse mortgage is a viable choice for many and should be carefully researched. If I can be any help or answer a question or even if you need more ideas please reach out to me.
