Case Study 6: Reverse Mortgage Can Provide Help For Adult Son

Problem: Mr. & Mrs. Anderson live in Maryland and his 76 year old mother lives in the house he grew up in St. Louis. As a long distance caregiver, he visits as often as possible between business trips and vacations to help his mother maintain her older home. She receives a modest income from Social Security and her CD’s. Recently, he has been sending her $500 a month to help out with the increased health care costs but he can’t afford to replace her leaky roof. Now, the Anderson daughter has been accepted to a university out of state and he is faced with tuition expenses for his own family. He feels caught in the middle trying to care for all of his family members. His mother owns her home free and clear and although she tells him she wants to leave it to him, he would prefer that she live comfortably and not have to cut back on essentials.

Solution: A reverse mortgage on his mother’s home could provide monthly income for his mother and pay for the needed repairs for the home. With a reverse mortgage, her $260,000 home could generate $136,000 in total benefit or a monthly income of $925.

Result: The additional income would allow his mother to pay for her medication and have a new roof installed in her home. The Andersons would have the comfort of knowing that his mother is living comfortably in her home and meeting day-to-day living expenses. In addition, they could now apply the $500 a month he previously sent to his mother towards their daughter’s college expenses.