My Parents Don’t Need a Reverse Mortgage… Do They?

By: Steven Cooley [NMLS #1389501]

There’s plenty of time to invest in my children’s future. Our family has a good lifestyle, minus a couple amenities. My kids can wear THOSE shoes a little longer. At this stage, I’d much rather spend my hard earned money supplementing my parents’ income. It’s fine. I got it. No big deal. I don’t need a new car or new water heater. The basement drain sits right next to the old water heater. That crack isn’t serious. We’ll fix it when we have to.

Mom and Dad own their house outright, but their property taxes are brutal. They can’t swing the taxes on their own. They’re retired, on a fixed income. Even committing to a Netflix subscription comes with serious consideration. They need my help. Mom keeps carrying on about a reverse mortgage, but Dad and I know better. Any product that marches some aging actor in front of you as the redemption of seniors is clearly a fraud. My parents aren’t desperate people. Those commercials are preying on her good nature. Mom must be slipping a bit – all those years of being a college professor must have fried her brain. Besides, I can help. I got the cash. No big deal.

My wife keeps complaining about the minivan making some weird noise, but it’s drivable. I see other people with duct tape on their mirrors. No big deal. Wait – our kid’s field trip costs how much? Are these kids world travelers or just going to the zoo?

Every time another check clears for Mom and Dad, I hear my wife’s tone shift. What does she want me to do? After all, they did raise me. They put me through college. They’ve always helped me when I needed it. I owe them. Come to think of it, I remember them making a good living. They worked hard their whole life. Nonetheless, new refrigerators are expensive. My Dad lost most of his pension in the crash. For me and my wife, it’s just a couple bucks every once in a while. But with every dollar I give them, Mom gets on her soap box about this reverse mortgage.

“What, Ma? You gave the guy my wife’s number? The mortgage guy? He’s calling her now?”

My mother should know better. My wife hates Happy Days and Law & Order.

Uh-oh. Cell phone ringing. They got my wife, too. She’s fired up on the phone. “Ok. Ok! I’m listening, honey!”

“Hold on – you’re saying they get access to the equity in the house? The bank doesn’t go on the title – mom and dad stay on it. And they don’t have to pay the mortgage back at all until they pass? How? Really? No, I didn’t know it was insured. Who pays for the insurance? It’s part of the loan?

So I bet WE have to pay it back, right? No? No unless we want to keep the house? All this and they don’t even have to make any monthly payments? Just property taxes and homeowner’s insurance – that’s pretty reasonable. Well, how much can they get? NO WAY! What’s the catch? I bet this costs a fortune!”

It doesn’t cost a fortune. Most of the fees are regulated too.

So we CAN get a new water heater. I mean, this reverse mortgage would help us all a lot. We wouldn’t have to keep sending the checks because they’d have money available. Guess Mom’s not slipping at all – I knew there was a reason she kept pushing me about this. She’s always been the smart one.

“Yes honey – I know, I know, I know. Minivan first. Got it. I hear ya. Future. Kids. Yes, okay. Love you too.”

Mom and Dad all set, and we can work on taking care of all of OUR expenses – sounds like “Happy Days” for everybody.

Click here to learn more to see if a reverse mortgage makes sense for you.

This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.