Articles for people who would benefit from a reverse mortgage or for family members of people who would benefit.

When Reverse Mortgages Make Sense

A common situation where a Reverse Mortgage is helpful is when a person over 62 wants to move, but the equity in the old home is not adequate to pay cash for the new home.  Some recent examples:

You may be able to move and not have to worry about having a mortgage payment

A lady was living in Utah home without a mortgage.  After her husband died, she wanted to move closer to her children in Colorado.  Because of the difference in home values and the costs associated with the move, the proceeds from the sale of the old home would not pay for a replacement in Colorado.  We used a Reverse Mortgage to help her buy a townhome that met her needs without a mortgage payment.

A couple had a home in Nevada where property values had declined.  They had a mortgage on the old property, but wanted to move closer to children in Colorado.  The equity from the home in Nevada was not enough to buy a replacement home in Colorado.  A Reverse Mortgage along with the equity from the sale of the Nevada property allowed them to buy a home in Colorado without a mortgage payment.

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You may be able to buy a home you originally thought to be financially out of reach

A single lady owned a home with no mortgage and wanted to buy a more expensive home.  She did not have enough cash to buy the home she wanted without a mortgage.  She did not have enough income to qualify for a regular amortizing loan, but she was able to buy the home she wanted with a Reverse Mortgage.

You may be able to stop working and still be able to afford the home you want

A 76 year old widow wanted to move from a regular house to a townhome so she wouldn’t have to deal with exterior maintenance.  She had a mortgage on the old home and needed a mortgage to buy the home she wanted.  We made the arrangements for a conventional loan using the equity from the old home as down payment.  She had enough income from her job and social security to qualify to the loan she wanted.  I pointed out that a Reverse Mortgage might allow her buy the townhome she wanted and give up the job she needed with a forward mortgage.

I’m always happy to provide free information to help a buyer understand their options with either a conventional forward mortgage or a reverse mortgage.
Please contact me at 303-469-1254 so I may assist you with your specific scenario.

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Where does your mom want to live?  Where do you want her to live?

The background to these questions is that as we all age, our living arrangements often need to change.  The changes can be the result of employment changes, health changes, or death of a spouse. The employment changes typically come as a person reaches the end of their full time employment.  Health changes can be a result of typical aging or other issues.  Death of a spouse may result in a desire for a change of scenery, often moving closer to children.35085010_m

Option 1 -Recombine Households

For some, the answer is to recombine the households of parents and children again after decades of living apart.  This could mean a child moving into the parent’s home as a care giver.  It could mean parent moving into the child’s home, or it could mean parents and child buying a home together.  Any of the above can be a solution for a particular family.  We can offer names of people who help facilitate these kinds of combinations.  They often involve a need to downsize the total accumulation of “stuff”.

Option 2 -Move to a Senior Community

For some, the answer is to move to a senior community.  There is a wide range of communities offering various levels of service to make life easier for mom as she ages.  The services range from independent living to full skilled nursing care.  Moves to these kinds of communities often involve selling the family home and using the proceeds to pay for life in the new community.  We can offer recommendations to people who will help you find the right community for mom.  This involves not just cost issues, but also finding people with similar capabilities and interests. These professionals are often paid by the community, much like a real estate agent, so there is no cost to the person moving in.  We can recommend real estate agents who will maximize the value received from the home being sold to pay for the move.

Option 3 -Mom Lives in Her Own Home

Surveys consistently find that the preferred choice is for mom to live in a home of her own.  The preferred option typically is for mom to live in a home she owns without a mortgage, but sometimes there are issues that go along with this option:

  • In some cases, when dad passes away, there is a reduction of income. One option to close the gap and keep mom in the home is for the child/children to write a check each month to subsidize her income.  Another option is to use a Reverse Mortgage to spend the equity in the house.
  • In other cases, a move to a different home is best case. In many cases, the move may be to move closer to the children/grandchildren.  The move may involve moving to another city or state.  If the move is from a higher cost to a lower cost market, there may be enough cash from the sale of the old home to pay cash for a new one.  The children may want to buy and pay for a home for mom to live in.  If mom has enough income to qualify, a traditional mortgage may close the gap between the equity available and the purchase price.  If none of the above solves the funding gap, a reverse mortgage combined with the equity from the sale might be enough for mom to buy the home she wants.

Contact me at 303-469-1254 for resources to help with any of the above.  We know people in many professions that can help with life’s transitions.  Just tell us what you are searching for.  We would be happy to connect you with people who can help.  If a traditional of reverse mortgage might help, we are happy to explain the options.