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#144: Using a reverse mortgage to fund home redesign


Moving into your home some twenty years ago, you were both thrilled with its woods-like setting. Now that three recent thunderstorms have resulted in downed trees and quite a bit of damage to the roof, you’re not so sure “Trees” remains your favorite poem. Luckily, none of your neighbors homes is close enough to suffer damage from your trees.  Despite the issues, you haven’t changed your mind about spending your retirement years “in place”, and in fact have completed the first stages of making the house safer and more easily navigable. Fortunately, a part time consulting gig (as a couple, you do training seminars for fledgling entrepreneurs) has allowed you (this time) to cover not only the costs for the first stage of the remodel, but also that portion of the tree removal and roof repair expenses not covered by insurance. Going forward, however, you realize you’re going to need a long-range funding strategy for completion of the remodeling and for property care emergencies.

Since you’d already made the decision to “age in place”, think about using the equity you’ve built up in the home itself as the financial resource of choice for completion of the remodel and for down-the-road emergency funding related to tree removal/damage repair Since an FHA-insured reverse mortgage line of credit will require no monthly mortgage payments, you can “tap” the resource on an as-needed basis to fund the remaining stages of making your home “senior-friendly”. It will be reassuring to note that the unused portion of your line of credit till continue to grow at the same rate as the interest being charged on the borrowed funds.

You’ll be able to wander in your “woods”, knowing that you’re financially prepared for whatever “excitement” Mother Nature chooses to bring to the stage.