“I’m old enough and smart enough to do a Reverse Mortgage.”

Through the years I’ve discovered if you have managed to hold onto your home, you are quite capable of making financial, family and personal decisions.

It is often said, “A Reverse Mortgage is complicated and hard to understand.” My response is, “Have you ever talked with someone who has a Reverse Mortgage?” They understand. 

A Reverse Mortgage is the only personal financial decision that requires professional counseling.  

 

This is the story of a lady who decided to refinance her Reverse Mortgage.

About 2018 I did a Reverse Mortgage with a couple who had immigrated from Eastern Europe in the mid-1960’s. She is a homemaker, he was a mechanic. They have two sons who were involved in the decision to take out their Reverse Mortgage.

In 2021 I got a call from her. “Hi Mark, I keep getting mail about refinancing my Reverse Mortgage. I remember you said if we needed to refinance, you would redo our loan for free.”

“Yes, I said that and I will still pay for the deal if it’s the right move for you.” 

We talked and caught up on the grandkids, the garden and her sons, then I asked, “how is your husband?” 

“He passed late last year.”

“Oh, my heart is with you.” I said.

“He had dementia for several years, I cared for him. Now I have to make some changes.”

“What changes are you considering?” I asked.

“As you probably know, I lost about half of our income. I’m able to make it but things are very tight.”

“Are you interested in refinancing your Reverse then?”

“Yes. How does that work?”

“We need to redo the loan; new application, appraisal, title and the basic documents but, you don’t need to pay the upfront Mortgage insurance again. That was your biggest cost the first time.”

“Yes. I remember. I looked through the big bundle of loan papers and saw that charge; 2.5% of the value of my house.”

“It was then, now it’s 2.0% but, you will get a credit for what you paid the first time. Then you’ll pay 2.0% on the increase in value, or “I’ll pay” that in the refinance.”

“I understand, thank you for making that clear.” She said.

I did the numbers on a refinance, she would gain about $45,000 in her line of credit. I emailed the new proposal, and she called me the next day.

“Hi Mark, this looks very good. I have a question.”

“Sure, ask away.” I said. 

“How can you afford to pay for this deal?”

“For several reasons, first I said I would. Second, I don’t have to pay the big mortgage insurance premium, again. Third, I’ll make plenty of money, the lender pays me to do your loan again, not you.  And you’ll end up with a lot more money in your line of credit. Would you like to think about this, or talk with your sons?”

I still chuckle when I remember what she said. “No. I’m old enough and smart enough to make my own decisions. Let’s do it.”   

A Real Reverse Mortgage Story.

Thanks for stopping, looking & listening