House Poor
Hi Terry, I will be to the point. I am 72 on social security and have an income of $20,000 per year. Monthly income 1,478. and bills total 1,415. I have 38K in my IRA.
I live up on Lauderdale Lakes in Wisconsin and my home has at least $500,000 equity. I need money and want to be able to stop living like this and start to be able to enjoy it. I can’t get a home equity loan because my income is too low, can pay the loan. Should I add my 2 daughters to be homeowners so the bank will see their income and allow me to get some money out? I do want to sell in the future but don’t know where to go. I don’t want to spend all the profits on another property and no reverse mortgage. Do you have any suggestions at all? You help so very many! Thank You.
Terry Says
Well, you’ve ruled out the best — and only— alternative— a reverse mortgage. And I have no idea why.
A RM seems the obvious and easy solution for you to continue enjoying your home for many years.
I did one for my father, and he enjoyed his oceanfront condo till he passed at age 95, still receiving his check! Yes,at his death he owed more than the condo was worth. But the lender has insurance against that possibility. We walked away from the property. Read this article I wrote about it:
https://www.terrysavage.com/reverse-mortgages-a-personal-story/
Otherwise, are your daughters willing to contribute say $500/month to your checking account so you a pay the daily bills? Will they cover any capital expenditures, repairs, etc? If so, you can leave the house to the in your will.
If you do a RM, they would have first right to repay the loan and accumulated interest at your death. If they can’t or don’t want to, any excess equity would be returned to your estate.
If,as in my father’s case, there was no equity left, they cannot be forced to repay the balance. Something if you decide to permanently move out.
But why not do a RM so you can enjoy these good remaining years?!
