Pauline sold her home after her husband died and paid cash for her condo in a 55+ community. Her community has a clubhouse and activities that allow her to engage with her neighbors and have fun, much more than in her old neighborhood.
Pauline's monthly income was less than $3000/month and although she paid cash for her condo she still had to pay taxes, insurance, and condo fees. Her savings were slowly dwindling and that was concerning to her. She was only 70 years young and hoped to live another 20 years in that home, but she was concerned about her ability to maintain her lifestyle.
With the Home Equity Conversion Mortgage (reverse mortgage), she was able to take enough money to pay off her car loan, establish a line of credit, and set up a Life Expectancy Set Aside (LESA) to pay her tax and insurance. With property taxes running about $4200/year and insurance at $600/year, she didn't have to pull that money out of savings when the bills came due. The LESA part of her reverse mortgage paid property taxes and insurance. The line of credit is available to purchase her next car (hopefully several years out) and take care of unexpected expenses as they come up.
She can now budget her monthly income more efficiently. She also discovered that some months when she had money left over, she could make a voluntary payment against her loan, which instantly increased her line of credit by the same amount.
With the HECM (home equity conversion mortgage), she still has to pay the condo fee and maintain the home, but the LESA takes care of tax and insurance. Pauline now feels so much more confident in her ability to stay in her home for the rest of her life! If you're interested in finding out more about how we were able to help Pauline and others, contact Renee Duval, (603) 255-5110, at Fairway Independent Mortgage Corporation.
