By: Kevin A. Guttman, Reverse Mortgage Planner – NMLS #384936
Ron and Linda Barker had been married for 36 years but had recently grown apart. With their children grown and living on their own, Ron and Linda discovered they didn’t have much in common any longer. Now in their early 60s, they decided to each go their separate ways.
As they met with their divorce attorneys to divide up the assets, they began to understand that their home, which they owned free and clear, may be able to benefit both of them. Linda wanted to keep their $400,000 home and was willing to get a reverse mortgage, taking out $200,000 to give to Ron for his half of the equity.
Linda was thrilled that she wouldn’t have a mortgage payment as long as she paid the property taxes, homeowners insurance, maintained the home, and lived in it at least six months or more a year—all of which she was willing to do. Linda was blown away that this was even possible.
Ron benefitted by taking his $200,000 equity stake and buying a maintenance-free patio home for $300,000, with only $150,000 down. He, too, will never have a mortgage payment, as he bought his patio home using a reverse mortgage. Ron was thrilled to have $50,000 left over to provide updates on the home and keep an emergency fund if needed.
The only person the Barkers appreciated more than the divorce attorney who introduced them to their reverse mortgage planner, was the reverse mortgage planner himself, who made it all come together in a timely fashion.
NOTE: Story is for illustration purposes only. The persons depicted herein are fictional and any resemblance to actual persons is a coincidence.
*This advertisement does not constitute tax advice. Please consult a tax advisor regarding your specific situation.