Using a Reverse Mortgage to Avoid Foreclosure

Richard, 76, and Maria, 73, were struggling to live on a fixed income. Their house was worth $150,000 and they had a mortgage equaling $40,000 left on their property. They had fallen behind on their mortgage payments because they only had the money to either eat or pay their mortgage, not both. After searching for "foreclosure solutions" on a search engine, they came across a reverse mortgage lender. Although they were not sure exactly what this entailed, they decided to give them a call.

After speaking with a loan specialist, they discovered that they would be able to save their home from foreclosure by taking out a federally insured reverse mortgage. The reverse mortgage would not only eliminate their monthly mortgage payment, but also give them access to additional funds to supplement their income. They could receive the additional funds in one of three ways:

Lump Sum	$55,906
Line of Credit	$38,156
Monthly Advance	$276

Richard and Maria decided that they would take the rest of money in a line of credit. Because they would no longer have a monthly mortgage payment, they would be able to afford their monthly expenses, but they wanted to be able to access the money in case of emergency. Not only did the reverse mortgage give them the freedom to stay in their home for the rest of their lives, it gave them the peace of mind to enjoy their retirement.