Reverse Mortgages:Helping seniors reverse their fortunes
It’s a problem many senior homeowners face today: Property taxes, upkeep, bills, and debt are straining their fixed incomes to the limit. While many seniors have substantial equity in their homes—or own them outright—borrowing that equity adds yet another monthly payment to their financial burden. What to do?
More and more seniors are turning to reverse mortgages as a way to reverse their fortunes. Available to homeowners 62 and older, reverse mortgages enable borrowers to tap the equity in their home, without having to make monthly payments. Instead, the principal and interest are paid to the lender when the house is sold following a “maturity event”—either when the homeowner moves from the house permanently or at his or her death. When the home is sold and the loan retired, any equity left over can be passed down to the borrower’s heirs. And, the borrower maintains control over the property—they can sell the home and pay off the reverse mortgage at any time.
To put it simply, a reverse mortgage provides senior homeowners with the cash they need, while allowing them to stay where they want: in their own home.
Reverse Mortgages Scenarios
Reverse mortgages can be used to address a range of situations. A few recent examples:
- A reverse mortgage enabled a 70-year-old widow on Social Security to pay off her outstanding mortgage debt and a car loan, slashing her monthly expenses. Plus, it created a substantial line of credit she could draw on when needed.
- A reverse mortgage helped an 82-year-old homeowner getting behind in taxes and other expenses pay off her debt and generate a tax-free income of more than $1,200 a month for as long as she occupies the house.
- A reverse mortgage enabled a couple in their 70s to purchase a condo in Florida, where they will live in the winter, without having to sell their home in Massachusetts—and without having to worry about mortgage payments.
While each of these situations is unique, a reverse mortgage offered the borrowers a solution for their financial need, while allowing them to retain ownership of their home—and without becoming a burden on their children or other family members. In fact, the most important thing a reverse mortgage can provide is independence.
Answers from a Trusted Source
As with any important financial obligation, there are many things to consider before deciding if a reverse mortgage is right for you. You should discuss the issue with an advisor, such as your lawyer or accountant, as well as family members. And make sure you get all the information you can from a mortgage professional you can trust.
For answers to your questions, turn to the mortgage specialists at Bridgewater Savings. We can explain how reverse mortgages work, how we can help you or a loved one address critical financial needs, and what programs are available. You’ll have the information you need to make an informed decision.
How to contact us
For more information, or to schedule an appointment, please use our information request form or call 1-800-356-8622.