Jim (63) and Judy (65) (not their real names) own a home in Medford, but they have always dreamed of owning an ocean view home on the Oregon coast. There was not enough equity in their home to purchase their dream home and neither wanted to continue working in order to purchase it.
Jim had recently been awarded a significant amount of money through a class action medical lawsuit. They could have easily paid cash for their home, but most of the money would have been tied up in the home’s equity.
Jim has a long history in the real estate industry and was aware of using a reverse mortgage to purchase a home. Unfortunately, he was referred to someone that does not specialize in reverse mortgages. After three months of getting the run around and no answers, he was referred to me by his real estate agent. Not to brag, but I had an answer for him in just a few days.
Scenario: $385,000 purchase price
Down Payment + Closing Costs: $192,717
Retains: $192,283 in cash
No monthly payments – just pays taxes, insurance and upkeep of the home.
This was kind of a tricky scenario. There were Federal tax liens (due to poor advice from a CPA), bankruptcies and a loan modification(due to medical issues). Fortunately, the tax liens were satisfied with proceeds from the lawsuit and we were able to overcome the bankruptcy and loan modification with letters of explanation and medical records. Had we not been able to overcome this, they would have been required to set up a lifetime escrow account which would have been about $57,000.
Because they were not required to set up a lifetime escrow account, Jim was able to pay cash for a new truck and Judy was able to pay cash for a new car. Jim told me the interest from investing the rest of the cash will pay the taxes and insurance, freeing up an additional $319 a month in cash flow.
Using a reverse mortgage has put Jim and Judy in a much better financial situation than if they had just paid cash for the home. They now own two new cars free and clear, they have a nice chunk of money sitting in a retirement account that was not there before, the interest from these investments will pay for their taxes and insurance and they now own their dream home on the coast.
Are you or do you know someone that is 62 or older that is talking about buying a new home in Oregon?
Have them talk with me. I am happy to run scenarios, answer questions and educate people about using a reverse mortgage and how it can help them buy a new home Oregon.
Remember, I specialize in reverse mortgages; they are all I do.
I also have a special report I wrote titled:
“How To Buy A Home With 50% Down Or Less and Never Make A Monthly Mortgage Payment”
If you would like a copy just give me a call or shoot me an email and I will send it over. It is only about 10 pages, but lays out the basics of a reverse mortgage and several scenarios as to why people would want to consider this loan option.