Over the years I have come across multiple clients that would like to do a Reverse Mortgage but for one reason or another they cannot. This can be quite frustrating for someone that thinks they have found a safe solution to the challenge of having a mortgage payment in retirement. There are ways to still eliminate your mortgage payment with a Reverse Mortgage, but some require a bit of sacrifice.
For those that owe too much:
There are 2 main solutions here. The first option is to withdraw funds from a Savings or retirement account and pay the shortfall at the close of escrow. The main question you need to ask is, would it be worth paying $30,000 or whatever your shortfall is to alleviate the stress of a mortgage payment in retirement? The second option is to sell your current home, and purchase a less expensive home with a Reverse Mortgage for Purchase. For example, if you are 65 years old and sell your current home for $500,000 and net $200,000 after paying off your mortgage, you can use that as a down payment on a new home of over $400,000. This may be a good solution as you may want to downsize, or get a single story for your retirement years, or move to a different community. Run your scenario on our Reverse Mortgage for Purchase Calculator.
For those that don’t qualify because the spouse is under 62 years old:
As of August 4th 2014 this no longer disqualifies you from doing a Reverse Mortgage. As long as the borrowers are married HUD allows for a non-borrowing spouse to receive protection on this FHA insured product as long as property taxes, insurance, and maintain the home in proper repair. The younger spouse can live in the home Guaranteed for life with no mortgage payments.
For those that couldn’t close the Reverse Mortgage due to some technicality:
Our group has been closing Reverse Mortgages that have fallen out of other lenders for 15 years. We consistently take difficult loans and find out a way to make them work. Call us with your scenario and we will see if there is a way to get it done for you.