Reverse Mortgage Loan Blog

Q: I am a 59-year-old single woman recently approved for Social Security Disability benefits. Two years ago I had a stroke. I assumed I would eventually be able to return to work, but health complications made that impossible. My income has taken a huge downward plunge and it is getting difficult to keep up with my mortgage and other monthly expenses. I have a lot of equity in my home but know this is not a sellers’ market. Would you suggest I look into a reverse mortgage?

A: It is our policy not to specifically endorse products but rather to provide information about existing resources for consumers. In this instance a reverse mortgage would not be an option for you because of your age, homeowners must be at least 62 years old in order to qualify for most programs. Reverse mortgages have been available to “house rich but cash poor” older adults for more than 20 years in Massachusetts but the industry only gained real momentum the last few years. Numbers indicate last year there was a 27 percent increase in the number of home equity conversion mortgages.

The original intent of this product was to provide older adults with sufficient cash flow allowing them to remain in their community residence as long as possible by tapping into a portion of the equity they had in their home. Retirees on a fixed income often encounter rising costs of essential living expenses exceed the amount they have coming in every month. While these individuals might find themselves limited in actual liquid income they often had considerable financial investments in a home they had purchased many years ago. Those who were approved for the mortgage had the option of receiving a lump sum payment, an equity line or scheduled payments. The original intent of this program was as a last resort option for a small number of older adults, those homeowners with no other options available to them who would be in jeopardy of having to give up their home without this help. Anyone considering a reverse mortgage would benefit from information provided by H.O.M.E. (Home Owner Options for Massachusetts Elders) Program 800-583-5337.

Your situation probably feels rather bleak at this point but there may be other options to help you out. Have you considered renting out a room or finding a roommate to share expenses? Have you consulted with an attorney or financial consultant to determine what their suggestions might be? If you come to the conclusion putting your property on the market is the best option start looking for alternative housing as soon as possible. Rental prices in desirable neighborhoods are high and depending upon your disability it may be difficult to find one adaptable to your needs. There are some subsidized units for adults under the age of 62 but the wait list can sometimes be several years.

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