We all dream of one day retiring. No more morning commute and the freedom to do what we want - fishing, traveling, reading, home projects, you name it!
But with the stock market dropping 40-50% last year, many pre-retirees saw their nest eggs get scrambled causing them to indefinitely push off their plans to retire.
This was the case with Sharon, a 64 year old Chicago woman who had worked as a nurse for over forty years including twenty years as an operating room nurse. Standing for hours at a time day after day wreaked havoc on her neck, back, and shoulders. Due to the physical strain of the job, she desperately wanted to retire but the economy’s effect on her IRA made retirement impossible. Until, that is, she explored a reverse mortgage.
A reverse mortgage allows those aged 62 and over to unlock home equity without having to sell their home, give up ownership, or take on the burden of a monthly payment. Because there are no monthly mortgage payments to make on a reverse mortgage, this government-insured loan doesn’t care about a senior’s income or credit score.
The loan does not need to be repaid as long as at least one borrower lives in the home. When that is no longer the case (either because they decided to move or have passed away), the amount borrowed plus interest is paid back in one lump sum – usually from the sale of the house.
Sharon, single and with no children, was living in a $200,000 condo in Chicago’s North side with a small mortgage balance of $24,000. She qualified for enough on a reverse mortgage to pay off her existing mortgage and provide her with an additional $78,000 to use however she saw fit.
With no mortgage payment to worry about and a healthy emergency fund, she was finally able to retire and seek a part-time desk job that was less physically demanding. The relief of finally being able to enjoy herself and live life on her terms caused tears of joy to trickle down her face.
In her case, a reverse mortgage was the right fit but they are not for every senior homeowner. If you would like to retire and you have significant equity in your home, you may want to explore a reverse mortgage.
For more info, go to the National Reverse Mortgage Lenders Association website or you can visit AARP’s website. You may also want to view my article entitled “A balanced report on reverse mortgages by AARP”.
Mark Schmidt has been a reverse mortgage specialist since 2004. In that time, he has guided hundreds of seniors through the reverse mortgage process. He is a veteran in the industry at a time when many others are “jumping on the bandwagon” of reverse mortgages.
A graduate of the University of Illinois, Mark also has an MBA from Loyola University and twelve years as a financial analyst with Merrill Lynch and Bank of America. To understand the needs of his clientele better, he was designated a Certified Senior Advisor in 2007 by completing additional studies of the social, physical, and financial aspects of aging.
Mark is the reverse mortgage expert for www.caregiverlist.com and is the author of “Reverse Mortgages: Facts and FAQs” which was in Amazon.com’s top five list for reverse mortgage books before selling out.
Mark can be reached at 773-504-9633 or at firstname.lastname@example.org.