Reverse Mortgage Alleviates Widow’s Financial Strain
Barbara and John considered themselves fortunate to have raised two lovely daughters who’d graduated from college, had good jobs and were happily living on their own. They were a few years away from paying off their mortgage. They had both transitioned to working part-time, with no immediate plans to completely retire.
John’s health problems were a cause of concern
But 70-year old John was diabetic and his health had been getting worse over the last few years. As with many diabetics, he had circulation problems and the doctors had had to amputate his left leg, which severely limited his activities and lifestyle. It also seemed to be the catalyst for an increasing number of related health problems.
Betty was at work one day when one of John’s co-workers called to tell her that John had collapsed and was rushed to the emergency room. Barbara left immediately for the hospital.
When she arrived at the hospital, she found John in a diabetic coma
Betty called her daughters and promised to keep them posted. Over the next week, John was in and out of consciousness, but he was weak, and his numerous health problems were worsening. Despite interventions by his medical team, John died in the hospital.
The economic realities of living on a single part-time salary
Over the next few months, Barbara was forced to sit down and think about the economic realities of life without her husband of 30-plus years. They’d both planned to continue working part-time for the foreseeable future. In that way, they’d be able to continue their comfortable lifestyle. John’s dying wasn’t part of this plan.
There was just one part-time salary now, and she had to pay John’s medical bills that Medicare didn’t cover, a mortgage, property taxes, insurance, utilities, a car payment, etc. She was feeling increasingly uneasy about how she was going to manage. Just one emergency would derail her.
A friend from church suggested she look into a reverse mortgage
A reverse mortgage had proved to be a life changer for her friend, Anna, from church. Barbara did some reading and talked to her daughter’s father-in-law, Jim, who had spent 40 years in the financial services industry. Jim advised against this, and she listened carefully, but she wanted more information.
Barbara talked to several other people and finally made an appointment with the lender whom Anna had recommended. She was very impressed with his presentation. He wasn’t a slick promoter. He made sure she understood how a reverse mortgage worked, that she absolutely needed to keep up with her taxes and insurance. That there were different ways her home’s equity could be managed to make life easier for her.
Barbara made one more appointment with a financial-advisor colleague whose opinion she had always valued. He understood the economics of her situation and agreed that this would be a good solution for her. It would ease her financial worries and provide stability.
The home’s equity paid off John’s medical bills
With her reverse mortgage, Barbara paid off John’s medical bills and her car, significantly reducing her monthly expenses. She also chose the reverse mortgage line of credit program. Credit lines associated with reverse mortgages have a growth factor. As time progresses, so will the amount of accessible funds.
A reverse mortgage dramatically improved Barbara’s quality of life
Barbara continues to work part-time, which she enjoys. It keeps her active and engaged. Most important, she now has a cushion and no longer fears the inevitable emergency from which she would be unable to recover.