May/June 2022 Reverse Mortgage Magazine

Those We Help “My parents going the reverse mortgage path, when they did, preserved their IRA funds, which grew nicely with the positive market,” says John III. In 2014, Patricia was ready to move into assisted living. She took the $30,000 still sitting in her line of credit and transferred the funds into her savings account to live off of after she moved into assisted living. The balance owed on the reverse mortgage was $220,000. Because the Great Recession had occurred only a few years prior, the condo had lost a lot of its value and appraised for $160,000. Luckily, because all reverse mortgages are “nonrecourse” loans, Patricia was never responsible for paying above what the home eventually sold for. “My mother was able to afford the best senior living facilities for the remainder of her life,” says John III. “This all was made possible because of her ability to take advantage of the reverse mortgage program. This preserved her retirement assets so she could benefit from them in the future.” The experience worked out so well for his parents that John III and Sarah got a reverse mortgage on their home four years ago when they were both 63. The reverse mortgage allowed them to pay off credit card debt. “Four years later, I still don’t have any credit card debt,” says John III. The Leers recently refinanced, which allowed them to lower their interest rate from 4.1 percent to 2.7 percent and obtain an additional $35,000 in a line of credit to draw on when needed. By refinancing, they were able to reduce the ongoing mortgage insurance premium they paid annually on the outstanding loan balance from 1.25 percent to 0.5 percent. The net result is that their loan balance is growing at a much slower rate compared to the original loan. “The reverse mortgage allowed us to pay off our credit card debt without taking money out of savings or our retirement,” says John III. “We recently bought some property, so I am using funds from the reverse mortgage each month to cover my obligations.” Fifteen years after he started selling reverse mortgages for Wells Fargo, which exited the reverse mortgage business in 2011, John III is still originating them, now for MidWestOne Bank. “Reverse mortgages provide a strategic retirement option for many older homeowners,” says John III. “Reverse mortgages allow people to pay for in-home care and other services that allow them to age in place or provide an alternative to selling retirement assets after a market downturn. While a reverse mortgage isn’t for everyone, it can provide the financial security that many people are looking for in retirement.” CALL TODAY ( 800) 581 - 1 162 www. LRES . com LRES get s your appra i sa l s done RIGHT the fir s t t ime . . . EVERY T IME. REVERSE MORTGAGE / MAY- JUNE 2022 33

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