In early 2018, after living in their current home for nearly 20 years, Alan and Grace (names have been changed to protect privacy), both in their early 70s, decided it was time to look for a smaller, more affordable home.
After talking to their Realtor, Alan and Grace found themselves in a quandary that is becoming all too common. Between their current home value and their loan balance, there wasn’t enough equity for them to purchase another home in the area that would suit their needs and provide them with a financial benefit. In order to achieve their goal of lowering expenses, they would need to move to another state, leaving their friends and family behind.
Fortunately, their Realtor recognized that a Reverse Mortgage might be a viable option for them and referred them to Don & Terri Opeka at Orion Mortgage, Inc. After meeting with Don & Terri, Grace was receptive to the idea, but Alan was less than enthusiastic. Don & Terri listened to their concerns, answered their questions and walked them through various options so they could make an informed decision that best suited their goals. Three months later, Alan and Grace decided to move forward with a Reverse Mortgage.
Just when they felt that their financial problems were over, Grace fractured her hip. The break was so bad that it required surgery and months of rehabilitation. By the time they were ready to resume the application process, another five months had gone by!
Their loan was processed and approved through the holiday season and in January, 2019, their Reverse Mortgage was in place. This meant their previous monthly mortgage payments on a $113,950 loan were eliminated, their taxes for the year were paid and they had an additional $32,277 line of credit available for any future needs.
Grace called Don & Terri early in the summer of 2019. Alan had passed away that spring and she was so grateful for her Reverse Mortgage. Without it, she would not have been able to cover her monthly expenses on her income alone. Since the loan had already been put into place, she didn’t need to worry about losing her home or feel pressured to make a financially-driven housing decision after Alan’s death.
It is not uncommon for a surviving spouse to sell their home, often at the urging of well-meaning family members, in order to downsize or economize. However, the seemingly large proceeds from selling a home quickly vanish when the cost of renting is more than a former mortgage payment or the available housing inventory doesn’t include homes within the price range of the profits that are left after selling.
If you or a loved one find yourself in a situation like Alan and Grace, or have already experienced the loss of a spouse and are trying to adjust your financial plan to new circumstances, please consider having a conversation with a knowledgeable mortgage broker about whether or not a Reverse Mortgage might be a solution before your home is placed on the market.
Orion Mortgage, Inc. is a Broomfield, CO – based small business and has been providing personalized service to Colorado homeowners since 1996. * 303-469-1254 * www.OrionMortgage.com *