what is a reverse mortgage
In my last post I mentioned that I would start to share some of my clients’ reasons for applying for a Reverse loan and I think I will start out with one of my earliest clients, Sylvia K.
Needless to say, I will not be sharing their actual names due their right to privacy.
Sylvia was in her early 80’s and a widow for a number of years, but did not have enough income from her Social Security to meet her monthly expenses and she had run up large balances on her credit cards to pay them and now found herself without funds to make the payments and still have money for her utilities and food.
I remember meeting her on a very hot summer day in her home and all the windows where covered up in heavy drapes and it was dark inside and she didn’t have any air conditioning and sweat was running down my spine.
Oh yes….it was “hot” in her home.
A trusted friend and neighbor ( Brenda) was also there, much to my relief because Sylvia was a tough New Yorker and she of course didn’t trust me.
Why should she? She didn’t know me and I was to be treated with great suspicion.
Anyway, it was hotter then Hell in her living room as she “grilled’ me about Reverse loans and made sure that I knew she was one, smart gal and had been in the clothing industry in New York, a “professional” and couldn’t be taken advantage of.
And she was scared as well. Here she was, in her 80’s and out of money. And I really liked her feisty attitude and her three cats, too.
( After she passed away about two years later, I found out about the feral cat colony she was feeding in her back yard).
Brenda asked me questions about the FHA loan, gently encouraged Sylvia to be “nice” to me. ( And here’s the interesting part. Sylvia and I became friends and she used to send me cute note cards to my home address, telling me how she was doing and included the names of her three cats in her signature).
And “yes” she did her Reverse mortgage.
She received a Line-of-Credit, paid off the credit cards and had a comfortable amount of money leftover to use whenever she needed it for anything.
She called me one year after she had celebrated her birthday in Hawaii, just to chat with me and tell me all about the two Birthday parties she had, had and mentioned she wasn’t feeling too well. I said that she probably had “partied’ too much.
But as it turned out, I was the last person she spoke to as she quietly died later that morning at home in her bed and her neighbor Brenda ( Who checked up on Sylvia every day) called me and let me know that Sylvia had passed away.
And as I like to say “she lived life on her terms”and I was the last person she spoke to and I like to think that in the “end” she trusted me.
I have been a Reverse mortgage consultant for almost 20 years and quite often, I am asked why would anyone ever use a reverse loan?
It’s certainly a reasonable question, but most of the time, it’s coming from a place of lack of correct information about the FHA HECM loan program for seniors and too often the “stories” and myths they have heard about reverse loans.
Initially when I first started in this profession, the most common reason for applying for it, was the need for additional funds to simply pay on going monthly expenses. Needless to say, the amount of money seniors receive from Social Security are woefully inadequate to pay mortgage payments ( if they still have a mortgage), food, utilities, medical expenses and the plethora of costs we all have each month.
In my next several posts, I’m going to talk a bit about the loan and how it’s become more affordable and other misconceptions that are still circulating in the public about it.
And I will share some stories about some of my clients ( Without naming them), as to why they chose to use a Reverse loan in their particular situation.
And…. no one has ever regretted their decision.