Irene is 75 years old and lives in a modest ranch-style home in New Hampshire, valued at $375,000. She owns her home free and clear, but like many retirees, her income is limited. Mary receives $2,506 per month in Social Security, and while she’s comfortable, there’s not a lot left over once the bills are paid.
Lately, her car had become a source of stress—unreliable, in the shop too often, and making her nervous about taking longer drives. She knew it was time for a new one. But taking on a traditional car loan felt overwhelming.
Let’s take a look at Irene's monthly budget:
$2,506– Net Social Security
less $385 - property taxes
less $85 – Homeowners insurance
less $78 – Car insurance
less $110 – Heating (average)
less $68 – Electricity
less $47 – Cell phone
less $135 – Internet & cable
less $75 – Home maintenance/repairs
less $140 – Gasoline
less $320 – Groceries
less $38 – Medical needs
= $1,025 left each month for everything else: gifts, fun, dining out, vacations, and saving for unexpected needs.
Irene looked at a $30,000 car, and the dealership offered her a five-year loan with a monthly payment of $590. That would eat up over half of her disposable income—too much stress for too many years.
Instead, Irene explored a reverse mortgage.
With a Home Equity Conversion Mortgage (HECM), she was able to draw $30,000 upfront to buy the car and also secure a line of credit of approximately $120,000. Because a reverse mortgage doesn’t require mandatory monthly payments, Irene had flexibility. But she chose to make a $163 monthly payment—the amount of accrued interest and mortgage insurance on the $30,000 she took to buy the car. By making the voluntary payment, she:
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Kept her loan balance from increasing by the $163
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Freed up her monthly cash flow (because she isn't making a $590 payment)
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Watched her line of credit grow over time
That’s right—the unused portion of a HECM line of credit grows over time at the same rate as the loan’s interest. If her loan interest rate is 6%, her $120,000 line of credit would increase by about $7,200 in just one year (if untouched). On top of that, by making her voluntary monthly payments, she’s adding another $2,000 in credit back into her line.
Peace of Mind, Not Just a New Car
Irene now has a reliable car, a manageable monthly payment that she can stop or adjust at any time, and a financial cushion in place. If a large expense comes up—a new roof, a medical bill, or an emergency trip to see family—she doesn’t have to panic. She knows she has her HECM line of credit available, growing quietly in the background.
For Irene, a reverse mortgage wasn’t about luxury—it was about security, flexibility, and control.
To qualify for a HECM reverse mortgage and/or Line of Credit, you must be over the age of 62 and have substantial equity. Even though mortgage payments aren't required, homeowners always have to pay for taxes, insurance, maintenance, utilities and, if applicable, homeowner association dues.
If you want to know how it can work for you, Renee Duval at Bookend Lending LLC, will give you a breakdown. Pick up the phone and call Renee at 603-345-5644.