Case Study 7: Reverse Mortgage Can Provide Funds For Home Improvement

Problem: A 79 year old husband and his 72 year old wife bought their retirement home in Arizona and have lived there for 9 years. Their combined income is $24,000 annually from Social Security and pension benefits. This is sufficient income to cover their expenses and a few extras, but now the house needs some major work. The air conditioning needs to be replaced and there is a major plumbing problem involving re-piping the house. Their credit is average but they do not like the prospect of incurring additional credit card debt and the extra monthly payments.

Solution: With a reverse mortgage, they would be able to receive the money they needed without incurring additional payments. Their $370,000 home could generate a benefit amount of $165,000 to pay for their repairs.

Result: The money from the reverse mortgage would allow them to pay for their repairs, take a cruise to Hawaii and leave $110,000 in their line of credit for future emergencies.