What Others Say
The majority of seniors interested in the H.E.C.M. program have claimed this would allow them to remain in their homes. We have seen such statements as "I didn't want to move around. I want to live on that street until I can't live anymore by myself."
This Page is here to reflect the experiences of H.E.C.M. participants as well as quotes from the U.S. Congress, AARP, the Bar Association, etc. regarding the H.E.C.M.
The U.S. Congress wants to ensure that "The H.E.C.M. program has improved the financial situation or otherwise met the special needs of participating elderly homeowners." U.S. Congress. Page 86 of the Evaluation Report of the FHA Home Equity Conversion Mortgage Insurance Demonstration, Final Report, Prepared for the U.S. Dept. of HUD.
Use a HECM Reverse Mortgage to Supplement Income
The main reason most seniors take out a reverse mortgage is to supplement their income. For many seniors, Social Security is their ONLY source of income. While income for many seniors, as a couple might be sufficient, in a recent study published by Columbia Legal Services in Washington, it has been discovered that over 60% of seniors as individuals are surviving on less than $820 per month. For them, a reverse mortgage is a godsend.
One client of ours is a widow named Mary, and resident of Everett, who, when we first met her, was trying to live on $800 per month and had a mortgage payment of $396.00. In order to make ends meet she stopped purchasing her prescription medicines. The medications were needed due to her psychological disorders (anxiety, depression, etc.). This, in turn, caused her to handle her responsibilities incorrectly. She couldn’t continue to pay her health insurance premiums and because she did not continue with her prescriptions she was embarrassed to continue with her doctor visitations. In addition, as was discovered during the underwriting process, she didn’t renew her homeowner’s insurance policy and was about to be 6 months late with her property taxes plus her home couldn’t pass FHA guidelines as she needed her window frames painted, due to excessive chipping. Her oven and television also stopped working for her and she could not afford to purchase either of these items. By obtaining a reverse mortgage Mary was able to tap into some of the $125,000 home equity she had built up over the years. The reverse mortgage provided her with enough monies to pay off her existing mortgage, pay for the contractor of her choosing for the paint job (which she chose to expand his services and paint her entire home), her property taxes were paid, she obtained a homeowner’s insurance policy, now has a plan for her health care which, in turn, allows her to continue seeing her doctor, with pride. In addition, she has a source to tap into for her ongoing prescription expenses, property tax and homeowner’s insurance premium liabilities. With the elimination of the mandatory monthly mortgage payments she feels she can make ends meet for the rest of her life. Upon our last visit with her she was on her way to the department store to purchase a new oven and television.
Use a HECM Reverse Mortgage as an Emergency Fund
There are also a large number of people who are “getting by” on a month to month basis. However, they are not able to handle setbacks involved in owning and maintaining a home. When furnaces break down, the paint starts to peel, water heaters go out, the roof needs repair, the carpet needs replacement, the body can no longer handle the responsibilities of home ownership such as lawn maintenance, housekeeping, etc. and the costs to hire such help cannot be budgeted, as well as property tax bills and homeowner’s insurance premiums, there simply isn’t enough money in the budget. A hand to mouth existence appears to be the norm for numerous seniors, but a HECM Reverse Mortgage can change all of that!
Use a HECM Reverse Mortgage to Pay Off an existing Mortgage
Many people take out a 30 year mortgage after reaching the age of 50. Trying to make a mortgage payment of even $300 to $500 per month on a fixed retirement income is a burden for many seniors.
For many people, a HECM Reverse Mortgage can provide enough funds to pay off an existing mortgage and free up additional cash for the homeowner. Use an example… Dropping the $1,200 monthly mortgage payment has made a tremendous difference in his quality of life.
James, age 88, and his wife Wilma, age 78, residents of Everett, were struggling with the potential and highly likely calamity that if James passed away first, the income would be reduced to just over $1,000 monthly, for Wilma, leaving her with a monthly mortgage payment of $832.00. How was she going to survive after James becomes an angel? Was Wilma going to have to move from her own family home she inherited from her mother? They thought the best remedy was to hide their head in the sand, place the problem in God’s hands and pray for the best. After meeting with their Reverse Mortgage Specialist another option was presented. By obtaining the HECM Reverse Mortgage there would be no further mandatory mortgage payments. In addition, there were enough funds to obtain a new car, replacing their current car with over 130,000 miles on it, which was another concern of James. James is continuing to pay, what he wants to, onto his HECM Reverse Mortgage understanding that his wife can tap into these payments in the future, kinda like a secret savings account for her, as the payments are credited into the creditline. They have also applied for and received their Senior Property Tax Exemption, due to the extra efforts of their Reverse Mortgage Specialist, this program reduced their annual property tax liability from $2,276.02 down to $1,151.63. In celebration of obtaining their HECM Reverse Mortgage, James and Wilma are going camping with their grandkids. They now praise God for providing.
Use a HECM Reverse Mortgage to help a Relative
Often times a client wants to help their children or grandchildren. One client wanted to help her son purchase a home in Arizona. By taking out the HECM Reverse Mortgage, she was able to give her son enough money and with his own monies he was able to pay cash for his own place. A fringe benefit of this is that she gets to see her son enjoy a part of his inheritance, now.
Many clients choose to use a portion of their funds to help their college-aged grandchild with tuition and books. A HECM Reverse Mortgage has made this wish a reality.
Use a HECM Reverse Mortgage when a Spouse is in a Nursing Home
Laurel, a 73 year old active woman, and resident of Everett, came to us with a difficult problem. She was no longer able to take care of her husband as he was a huge man (not obese) and had a stroke. While MediCaid was paying the major portion of the bill for the nursing home, how was she going to get there in their 13+ year old car, pay for the roof that needs to be replaced (it had been reroofed 3 times already, now it needed to be stripped and reroofed, an expensive proposition), in addition, how was she going to survive after he becomes an angel, her income will plummet by over 60%. All of these issues were handled quite readily, without sacrificing the benefits of Medicaid, using the HECM Reverse Mortgage.
Use a HECM Reverse Mortgage for In Home Care
In Home care doesn’t necessarily mean nursing care. By using the benefits from a HECM Reverse Mortgage seniors are finding a source of monies to hire the extra help they need for housekeeping (to keep away grunge, dust in high places and their floors). This kind of help can be obtained on a semi-weekly basis for a very nominal cost. Or a gardener for lawn maintenance, while landscaping can be expensive, most seniors already have their yards completed but can no longer maintain it. A HECM Reverse Mortgage can supply the funds necessary for these needed services.
Use a HECM Reverse Mortgage to buy that Retirement Home
Mr. and Mrs. G, residents of Arlington, have numerous friends here in Washington that every Winter go onto Arizona. They could not afford to obtain a mobile home in Arizona, as their friends had, so opted to stay with one of them sporatically or just stayed at home. With the benefits of a HECM Reverse Mortgage they were able to purchase a mobile home, for cash, in the same park as their friends and now enjoy being a snow bird, too.
Use a HECM Reverse Mortgage to reposition income producing headaches
Meet Nina, a very active 74 years young widow and resident of Everett. She lives quite comfortably in her beautiful home, thanks to her husband leaving her with enough funds to pay off her mortgage and another home in Everett used for rental income. Her husband made all the financial decisions and took care of the rental in its entirety while he was alive. Problem is now that he has passed away Nina didn’t understand the ramnifications of a rental property. When a tenant asked for an upgrade, Nina, the landlord, provided it in the same quality as she would expect, thus creating a scenario wherein her rental income ‘net’ bottom line was dwindling. The ‘gross’ annual income from this property exceeded $9000, but after property taxes, homeowner’s insurance and those dreaded upgrades, her ‘net’ annual income was barely $4000. This property also caused her income, being reported to the county assessor, to exceed the limits of the Senior Property Tax Exemption program, and disqualified her for this benefit. A HECM Reverse Mortgage Specialist, working in concert with a highly experienced financial planner, recommended obtaining a HECM Reverse Mortgage on her home and placing these proceeds into a Single Premium Whole Life Insurance plan that also provides benefits for Long Term Care. While these transactions were taking place, Nina placed her rental property on the market for sale. Due to the upgrades, the property sold very quickly and at full price. Nina placed the sales proceeds from the rental property back into her HECM Reverse Mortgage, thus creating an account for which she could tap into, which, she intends on pulling out $9000 annually. This should last Nina to her age 100. If she is still living at that point in time and still needs the $9000 annually she’ll be able to pull that out of the life insurance plan she purchased. She now enjoys an annual net income from her HECM Reverse Mortgage at over twice the amount she was receiving from her rental property, TAX FREE and HASSLE FREE, plus no more phone calls from tenants.
As you can see, the power of this financial tool, known as the HECM Reverse Mortgage, is only limited to the imaginations and differing situations of the individuals involved.
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