A few years ago, I met with my Home Equity Bank representative. He was trying to encourage me to go visit my financial adviser referral partners and offer Reverse Mortgage products. I explained that I did not know anyone who had a reverse mortgage so it was hard to promote to financial advisers or anyone.
I asked him to tell me a success story and he came back with a great one that ticked most of the boxes. A couple in their mid-70s had met with a financial adviser to go over their portfolio and financial situation. They wanted to sell some of their investments to get a little cash.
What the adviser saw troubled him. The couple had about $200 a month left over after they paid for their bills and groceries. What’s more, they were driving a 20-year-old car, their home needed repairs and they hadn’t been on a vacation in years. It was a classic case of house rich, cash poor.
The adviser contacted Home Equity Bank and they appraised the house. The couple were eligible for $200,000 based on the value of their home. They took this money and the adviser invested a little more than half in funds that would provide them with $1100 a month in income. They took $25,000 and bought a new car, did some repairs to their home and took a vacation. They took the balance and used it to help out their grandchildren with university with tuition. With one move, they were able to increase their cash flow, make their home more comfortable, do repairs, enjoy their retirement and help out family.
A reverse mortgage is not the answer for everyone but it can be a life altering decision for seniors who are struggling with financial stress or simply want to enjoy their golden years!