Retired and Can’t Refi? You’re In Good Company

Name Ben Bernanke ring a bell? As in the former chair of the Federal Reserve?

According to his own account when speaking to the moderator of a financial conference this past week in Chicago, Bernanke said, “Just between the two of us…I recently tried to refinance my mortgage and I was unsuccessful in doing so.”

“I’m not making that up,” he added when the audience laughed, his comment sounding vaguely like an homage to humorist Dave Barry.

And what was the conference Bernanke was addressing? None other than the National Investment Center for Seniors Housing and Care.

So that was October 2; fast-forward one day to October 3, 2014. I met with an aging homeowner and her adult son. The mother suffered an adverse health event and has had to quit her job. She is now struggling to make her monthly mortgage payment, and does not want to deplete her savings…only to be back in the same boat once savings are gone. Like Bernanke, she tried to refinance but was unsuccessful in doing so.

She considered selling her home, until she did the math and realized proceeds from the sale would not last as long as she’s hoping to.

A relative told her to look into reverse mortgage.

What does this accomplish?

  • One – never again does she have a monthly mortgage payment.
  • Two – she now has a cash buffer, in addition to other savings, as a rainy-day fund.
  • Three – she never has to move, unless she wants to.

Property taxes, if applicable, are still due, as is homeowners insurance, and routine home maintenance remains the homeowner’s responsibility – in other words, it’s still her home.

And even though the program has now been around decades, it still bears mentioning that the bank does not own the home. Title remains in the homeowner’s name. Or, to repeat myself – it’s still her home.

A reverse mortgage cannot fix all the challenges associated with aging. But a reverse mortgage can often fix one of the most vexing issues, namely financial insecurity as it relates to seniors’ housing.

As I’ve said many times, in retirement no one is going to get by on just their Social Security. No one is going to make it on their 401-K. Few are going to survive on their pension, their annuity, their IRA, their bank account – or their reverse mortgage. But when added together, all these combine to create a long-term means of maintaining dignity and independence in retirement.

If you would like to explore how an FHA-insured reverse mortgage might help with your retirement plans or those of your loved ones, give me a call. I always love hearing from you.

Laurie

Laurie MacNaughton [506562] is a freelance writer and Reverse Mortgage Consultant with Atlantic Coast Mortgage.

She can be reached at 703-477-1183 Direct or Laurie@MiddleburgReverse.com

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