By: Kevin A. Guttman, Reverse Mortgage Planner – NMLS #384936
David and Michelle met later in life, both divorcees with grown children. Michelle was an interior designer, something that became quickly evident when walking into their quaint home. David was a truck driver and loved to tell stories about the America he had seen over the years. Michelle continued to do some interior design work and also enjoyed volunteering. She liked to visit her son and daughter’s families every year, both of which lived out of state. David’s children lived nearby, and he enjoyed watching his grandkids play sports on the weekends.
At ages 71 and 66, the Meyers were a few years into retirement when their furnace went out, costing them several thousand dollars to replace. A bad storm also caused damage to their roof, and while insurance covered the roof, they still had to pay a large deductible. These unexpected expenses caused the Meyers to tighten their budget’s belt. They were still doing okay, but it made them consider what they’d do if something else were to go wrong. They believed they would cross that bridge when they came to it.
Then, something exciting happened. David’s cousin reached out to him and invited him to attend their family reunion—the first in a decade. They really wanted to attend, but with their limited budget, they didn’t know how they could. Michelle felt the reunion was important, as it would likely be the last time they would see certain family members. She wanted the vacation and wanted to get to know more of the family members she had not yet met, but whom David had talked so much about.
They sat down together to look at their budget and how to make the reunion possible. David reluctantly brought up the idea of a reverse mortgage. Michelle said she didn’t know much about them but was open to getting the facts if it meant they could take the trip.
David and Michelle met with a reverse mortgage planner, who explained how the process worked and how they could receive and use the equity from their home, usually tax free. The advisor answered their questions, and they were surprised how recent changes to reverse mortgages made it a viable option for them. They reworked their budget and saw that not only could they eliminate their mortgage, but they could also pay off a high-interest credit card, reducing their monthly expenses so they could put money aside for any future emergencies. They also discovered that they could take some money to travel to the reunion.
David described the experience as being similar to reaching into the pocket of an old coat and finding cash. He never thought that using his home’s equity could help them in this way. David’s children decided to join him on the trip for the family reunion. It was a great experience that also allowed his children to connect with extended family, something he feels is a true legacy.
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.