In my last blog, I wrote about my Mom, who really isn’t a good candidate for a reverse mortgage? Why? Because she bought her home outright and has no mortgage to begin with. She took out a home equity line of credit that is set at 3% interest on whatever she uses. RP Funding Corp.’s Tallahassee Reverse Mortgage Specialist Bobby Smith agreed that a Reverse Mortgage wasn’t in her best interests.

Bobby told me about a couple who live on Florida’s west coast. They had their mortgage almost paid off and wanted to pay it off completely and have a little extra cash. Rather than take out a second mortgage, they chose a reverse mortgage with a line of credit. They had both retired and were very interested in not having a monthly mortgage payment.

With the money they received in the line of credit, they bought a second home in a small senior citizens’ mobile park close to the beach. The reverse mortgage credit line allowed them to now have two homes without any monthly payments.

Had this couple gone the traditional path and bought the second home with a conventional or FHA loan, they would have had two monthly mortgage payments and would not be able to use the equity in their home.

As unpredictable as life is, the wife was later diagnosed with cancer. The treatment center was very close to the mobile home park where they owned their second home. Being close to the treatment center, and not having a monthly mortgage payment, relieved them of a heavy financial burden. For this couple, a reverse mortgage was almost literally a life saver.