Solano Real Estate Scene: Wealthier seniors opt for reverse mortgage
Over the past year, more of our reverse mortgage loan applications are coming from senior borrowers who don’t need a reverse mortgage but want one for a variety of reasons.
In one case, we had a widow and a widower purchasing a home together but were not married. They had been dating for a couple of years and fell in love. They traveled together and played together, enjoying retirement on the golf course a couple of times a week. They each had grown children and grandchildren.
His net worth was three or four times the size of hers, but she was no slouch, with great credit and lots of equity in her home. His income was approximately twice hers and he was a very healthy 80 and she 72.
They wanted to live together but weren’t ready to get married yet and combine assets, so we came up with this solution that worked for both him and her.
They purchased a beautiful $650,000 one-story home in a golf course community and each put down $160,000 and obtained a fixed-rate reverse mortgage for $330,000. They took title as joint tenants with the right of survivorship so that if one dies, the other gets the home without heirs forcing a sale or a move.
The reverse mortgage also protects the widow because if they had done a traditional mortgage and he, the older of the two, kicked the bucket, she could not have afforded to stay in the home on her income alone.
They now get to live on the golf course until she turns 100 and he is 108 with no house payment, happily ever after.
This is one of my favorite reverse mortgage love stories of all time.