As a reverse mortgage loan officer, I see many heartbreaking stories every day. The sad truth is that most of us have not adequately planned for our retirement. I myself am 64 years old and fall into this category. Most of my friends are already retired and have large 401Ks or Pensions to fall back on. Almost all of them worked for big companies.

I took a different path. I was self-employed for most of my life. He gave me many freedoms and the ability to control my own destiny. I was moderately successful, able to maintain a comfortable lifestyle, buy flashy cars and clothes, and take expensive vacations. I did not save money for my retirement and I will have to retire on the fixed income provided by the Social Security Fund. If I had paid off my house, I would be much better off and could almost survive on the $1850 Social Security would pay me if I retired now. If I wait until I’m 66 and 6 months, that shoots up to $2,200 and if I keep working until I’m 70, I’ll get a whopping $2,600 per month. The only problem is that I haven’t paid my house.

At this point, you would be much better off in a reverse mortgage. A reverse mortgage would eliminate my home payment for the rest of my life and allow me to keep my home forever. They can never pay off the loan unless I die, move out of the house, or sell the house.

You would be responsible for taxes and insurance, which comes to about $300 per month. I would also have to pay off my Home Owners Association debt, which is currently about $325 per month. So out of my $1,850 per month from SSA, I would have to live on $1,200 per month. It is possible but not very comfortable. It’s not what I’ve worked for 40 years to achieve

A reverse mortgage will also give me a line of credit that I can draw on at any time. If I don’t touch it, it will grow by about 3% per month. It doesn’t sound like much, but keep in mind that it’s more than the interest you’d get at a bank. Once my value is established, they can never reduce the amount of my line or credit or pay off the loan even if the value of my house goes down.

If you had a HELOC, a home equity line of credit, the HELOC amount can and has been reduced in the past due to prevailing home values. This happened to almost everyone in 2008 when the subprime bubble burst. People discovered that when they needed the money the most, it was not available to them. This caused many people to file for bankruptcy because they could no longer pay their bills after being laid off from their jobs.

The reverse mortgage prevents this from happening. They put an insurance policy on the loan called Mortgage Insurance that protects the bank in case the values ​​plummet again. It also protects the borrower from the adverse effects of his bank’s failure.

A reverse mortgage was designed for seniors who were low on cash but had accumulated a large amount of equity in their homes. It’s not unusual for me to find seniors trying to get by on less than $2000 a month, but having several hundred thousand dollars in their homes that are just sitting there.

If you find yourself in this situation, look into a reverse mortgage. It will help you with your finances, give you a little more spending money each month, and give you the security of staying at home as long as you want.