Cathy and George were married for 46 years. Their home was paid for.
George was religious about paying extra with the monthly mortgage payment, which took what they would have put into a retirement account.
George had a massive stroke and died. Cathy was lost without him. She worried about how she would keep the home and pay all the monthly bills.
The home was old and too big for Cathy.
She worried about what she would do if a major emergency ever happened.
Cathy had a savvy nephew who was a Realtor. She asked him to come and look at the home and give her some suggestions. Her nephew explained that she had three choices:
1- Stay put and pray the house held together. Any major repair bills would be a financial disaster for her.
2- Sell the home and rent hoping she would not run out of money.
3- Sell the old home and buy a newer home that fit her needs. She could use a large portion of the proceeds from the sale of the old home as a down payment on the newer home. The remainder of the purchase price could be funded with a Reverse Mortgage.
1- She sold the old home and purchased a newer home with some of the proceeds from the sale of the old house and used a Reverse Mortgage to finance the balance of the purchase price.
2- She had no mortgage payments.
3- She put the remainder of the proceeds from sale of the old home in the bank for a “rainy day.”