New Jersey Reverse Mortgage - Case Study (Closed in July 2009)

While I have found there is plenty of reverse mortgage program information on the internet, I have seen a lack of information pertaining to actual cases. So, to share how a Reverse Mortgage can impact an individual life, I would like to share the details of a recent reverse mortgage I originated in New Jerey. For the purpose of this Reverse Mortgage Blog, I am going to call the homeowner Don. (FYI I am licensed in over 20 states to originate reverse mortgages, this is just one recent example that happens to be in New Jersey).

Don, the homeowner, was introduced to me through his adult children who attend church with an associate of mine. Over the previous six months Don had the unfortunate experience of providing home care to his terminally ill wife. Now, after her passing, Don found himself in a situation where he needed to free up cash on a monthly basis.

The Situation: Don's home is in a 55+ community and is worth $140,000 (as of July 2009). His existing mortgage was $81,000 and he had a credit card to pay off with a balance of $5400. Additionally, he wanted to purchase a car which was better suited for his needs.

The Solution: Using the Federally Insured Reverse Mortgage, also called a Home Equity Conversion Mortgage (HECM) , we were able to pay off his mortgage, pay off his credit card and give him almost $9,000 to purchase a new vehicle. Don no longer has a mortgage payment, and his credit card will be paid off in full. Don has also had his eye on a new vehicle which he will now be able to purchase with cash.

Prior to the reverse mortgage, Don was paying over $900 per month towards the mortgage and credit card. These monthly payments were limiting his ability to interact socially and travel which is vital in his current state of recently losing his wife. The Reverse Mortgage that Don's adult children recommended to him will enable him to begin to interact again - and it is hard to put any type of pricetag on that.

An outcome such as this was special to me because it has the ability to change not only Don's financial outlook, but also his social life.