Jim (72) and Linda (71), not their real names, just bought a house together. I shared Linda’s scenario just a few months ago. She went from living in a 5th wheel to buying a home. During the process of buying her home, Linda met Jim. Two and a half months after closing on her new home, she listed her house for sale. It sold in just 48 hours and she moved in with Jim. Is that a whirlwind of activity or what? Linda did lose some money doing this. She sold it for a little more than she bought it for, but not near enough to cover the listing and closing fees.
Shortly after selling her home, Jim and Linda came to see me about buying a home together. Linda was obviously well educated about reverse mortgages, but Jim was new to this. He liked what he heard and they decided it was a good idea to buy a home together. They were in no rush and were planning on spending the summer looking for the right home. Those plans changed very quickly.
About a week after we met, Jim and Linda found out that Jim’s son had just sold his house and was planning on moving into the home Jim and Linda were living in. The rush was on. Luckily they ended up finding a home rather quickly.
Purchase Price: $255,000
Down payment and closing costs: $117,220
Monthly Payments: $0
Taxes and Insurance: $302 monthly
Renting a similar size and quality home, assuming they could have even find one in today’s rental market, would have been anywhere between $1400 to $1700 a month. They could have financed the home purchase traditionally as well. With the same down payment, the payment, plus taxes and insurance would have been right around $1000 a month. This was a nut neither wanted to crack and they both agreed it would be even tougher to crack if either one of them passed away.
I don’t know if there are going to be wedding bells ringing any time soon, but I do know that Jim and Linda are happy and loving their new home.
Who Do Know? Who do you know that is 62 or better and thinking about buying a new home? Have them give me a call to talk about buying that new home with a reverse mortgage. It often times can make much more sense than traditional financing or paying cash for a home.
Need a Speaker or Want a Class? I love teaching and speaking. I can present for as little as 10 minutes all the way up to 2 hours about reverse mortgages. I can offer CE credit for real estate or insurance agents, as long as the class is through an association or non-profit. If you need a speaker or a class, just give me a call.
Don’t Forget! Check out my column in the “Oregon Senior News” paper. You can find the paper online or at local restaurants and grocery stores. This month’s article talks about the three biggest challenges boomers are facing in retirement; living longer, retiring with debt and not having saved enough.