The Perfect Solution: Reverse mortgages can be a good option for more income

2013-07-07T11:15:00Z The Perfect Solution: Reverse mortgages can be a good option for more incomeMichelle Krueger Times Correspondent nwitimes.com
July 07, 2013 11:15 am  • 

Celebrities including Henry Winkler “the Fonz” from Happy Days, Robert Wagner “Jonathon Hart” from Hart to Hart and the late Peter Graves “Jim Phelps” from Mission Impossible are the very recognizable faces of the reverse mortgage industry. They come into our homes on TV to tell us how seniors can live retirement the way it was meant to be, simply by tapping into the equity of their home.

A former loan officer for more than 30 years, Nancy Kraus started looking for a reverse mortgage online by making inquiries with the companies from TV.

“I really wasn’t comfortable with that. I wanted to talk with someone in person,” she said. “I called the number from an ad in the paper. When he knocked on the door, I almost died. Ed (Dumas) was the guy that sold me this house. I was very comfortable working with Ed. I knew I wasn’t going to get ripped off.”

Because she still loves her home and the location, Kraus, who was the first to build in White Oak Estate’s Easton Park 13 years ago, needed to find a way to survive on social security after losing $60,000 in her pension funds.

“It’s part of our economy right now,” she said. “Social Security is going down and living expenses are going up. I know I’m lucky because I have a house, and who knows how long I’m going to live – you don’t know what tomorrow brings. But, the one thing I do know is that I don’t want to go to a nursing home. I also wanted to leave everything to my kids, so it took me over a year to make my decision.”

As it turns out, she wishes she would have made the decision sooner.

“I just received my first check, and it’s really nice,” Kraus said. “Right now, this is my answer. Everybody has the wrong impression of reverse mortgage. I still own my house. My name is on the deed. I control my house, pay the taxes and insurance like everyone else. Ed made it an easy experience for me, and everything went well. Doing it with someone local really helped.”

Denise Little, who has been in the real estate business since 1985 and a Broker Associate with McColly Real Estate in Chesterton since 2009, agrees.

“A lot of people, especially seniors, are leery of anything that’s new, and they should be,” she said. “But sometimes there comes a point when you have to decide if it’s better to live a good life and a safe life over living someplace familiar. I was working with a client who was living in a 2-story condo in Chesterton when her husband died and then her mother moved in with her. She was looking for something on one floor, something newer and clean with two bathrooms, but, after looking at all her options, couldn’t really afford what she wanted. She was working at the time and had put some money away in a bank account for her children. We all want to leave our kids in a better place.”

A short time later, the mother of Little’s client fell down the stairs and was hurt badly. That’s when the search for a new home restarted, and the topic of a reverse mortgage was brought up again.

“Ed Dumas had come to the office and explained his program to us, so I knew who to call,” she said. “It ended up being such a good thing for her. She ended up needing two foot surgeries and is now retired. Her sons have been very supportive and stayed informed through the entire process. I told her that if she was concerned with leaving something for them, she could always put the $700 that would have gone to a mortgage payment in the bank every month. That way she wouldn’t lose the house if something happens. It worked out really well for her since she was out of work for quite a while before retiring."

Little’s colleague, Paul Boyter, Managing Broker of McColly Real Estate in Chesterton, has been a real estate professional for 22 years.

“My father lives in a condo in Aberdeen, so I spoke with Denise about the reverse mortgage she did with Ed,” he said. “At that time, we had been working with another lender who just couldn’t get it done because condos needed to be specially approved for refinance. Ed did a phenomenal job. His follow up was amazing. That’s the biggest thing to me in this business. You always want to be up to date. The whole process took several months.”

Reverse mortgage freed up $7-800 a month for Boyter’s father who was living on social security and a pension from the pipefitters union.

“I’m really glad it worked out for him the second time around,” Boyter said. “At his age, on a fixed income, he’s really enjoyed those checks over the last few years.”

More recently, Cathy Mattan, Realtor Associate with Rossi & Taylor Realty Group, was helping a client sell her mother’s home.

“I thought, I’m 65 and retiring soon so why not have Cathy show me what my options look like since I’m already working with her,” the client said. “I’ve been renting the same place for over 20 years, and I could stay there forever. But, I think I would like to have something that’s my own now, something I could afford on social security. A place where I can have pets and decorate it the way I want.”

“To help her get prepared for the home buying process, I introduced her to a lender I normally work with,” Mattan explained. “He identified my client as a perfect candidate for reverse mortgage and recommended Ed Dumas. I have great faith in my lender. He’s meticulous about details so I knew Ed would do a fantastic job. Once we found just the right townhouse – an end unit with a private entrance and pretty much her own yard, my client was ready to learn more.”

“It came down to the fact that I didn’t want to have to worry about making mortgage payments, but I didn’t really understand how that could be possible,” the client said. “I was looking forward to retirement so I was hopeful that I would be able to afford to do this. Ed was very patient and answered all my questions. I was also worried about the future. I had always planned on leaving my children some of the money I had saved.”

“Ed is an expert, very knowledgeable in his field,” Mattan added. “As an agent, this my first experience with a reverse mortgage, and my client was confident about her decision once she made it, no reservations whatsoever. Now I have a new tool to offer my buyers.”

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