Reverse Mortgages can be confusing
Jacqueline Marshal* and her husband Tom* were comfortably retired when Tom died unexpectedly. Because both of them had been drawing a Social Security pension, Jacqueline’s monthly income was reduced by $700 a month (the smaller of the two pensions) upon Tom’s death. Jacqueline considered replacing the bulk of that lost cash flow by taking out a reverse mortgage loan against their paid for house, but, after further study, decided not to. She was disappointed to learn that the reverse mortgage would only allow her to access a fraction of her home equity. A further concern was that, if she decided to move some day, her choices would be limited because of the reduction in home equity the reverse mortgage would create. So Jacqueline decided to forego the reverse mortgage, tighten her budget and stay in her home. Five years later, when home maintenance became a greater burden, she decided to sell her home and purchase a condominium. Because she had not given up her home equity for a reverse mortgage loan, Jacqueline was easily able to afford the condominium. She is now very thankful that she decided against the reverse mortgage.
Now…lest you infer from the title and opening vignette that I am dead set against reverse mortgages, please understand that this post is part of a four part series.
{ 0 comments }
