Thursday, April 26, 2007

Our Home is "Working" For Us

This week we are delighted to welcome another guest blogger - George Goth. George has held a popular series of informational sessions at Capabilities about reverse mortgages. These financial tools can make very good sense for a large number of people. George helps explain whether they might be a good option for your or your parents. He is also holding a free session on this Thursday at Capabilities. Details on our Events page.

Many people think Reverse Mortgages are just for senior homeowners who have lived in their homes for a long time, own the home free and clear, and need cash. Many homeowners are now utilizing Reverse Mortgages in new and creative ways to finance a wide variety of family needs, ranging from in-home care, to vacations, to remodeling their current home, to purchase of a second home, or even down sizing to a smaller home.

The following is a compelling true story of how one couple used a Reverse Mortgage to pay off their debts, complete some much needed remodeling projects and still receive a monthly income. All of this was accomplished without the requirement to make monthly mortgage payments.

Harvey and Jane Jensen (not their real names) have lived in the Denver area since shortly after they were married in 1965. They still live in the same three bedroom ranch-style home they purchased in 1970. They love their home and have no desire to move.

Harvey’s income situation changed drastically in 1998 and they were forced to take out a home equity loan, just to make ends meet. And that worked well until just recently. Harvey started thinking about retirement, but they were concerned about their ability to continue making the monthly home equity loan payment.

Their oldest son suggested they check out a Reverse Mortgage. He told them he knew they would qualify since they were both over 62 and had equity in their home.

I met with the Jensen’s and provided them with a complimentary, no-obligation, analysis of the Reverse Mortgage program and the funds available to them. They were pleased to learn the funds received from a Reverse Mortgage have no impact on Social Security and Medicare benefits and they did not have to meet any income, employment, or credit score requirements to qualify.

Following my meeting with the Jensen’s, Harvey and Jane attended a free, one hour counseling session with a HUD approved housing counselor. This is a requirement for obtaining a Reverse Mortgage. They left this session feeling even more comfortable with their decision apply for a Reverse Mortgage on their property.

Based on the $193,000 value of their home, the age of the youngest borrower (69), and the current interest rate, the Jensen’s had $102,000 of tax-free funds available. After paying off the existing home equity loan of $38,000, Harvey and Jane still had $64,000 to use however they desired.

The Jensen’s decided to receive a $300.00 monthly payment (guaranteed as long as one of them lives in their home) and leave the remaining balance in a line of credit to use as needed. They plan to use some of the money to remodel their kitchen and upgrade the landscaping.

Harvey said, “The Reverse Mortgage is really great. We paid off our old loan, have a guaranteed monthly income, and now we can finally make the improvements we’ve wanted to make for some time.” Jane added, “All of this is possible without even having to make monthly mortgage payments. We are now making our home work for us. What could be better than that?”

George is a Reverse Mortgage Specialist with Universal Lending. He can be reached at (303) 420-9601, (800) 758-4063 ext. 304, or Consider coming along to George's session on this Thursday at Capabilities. Details are on our Events page.


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