Reverse mortgage could be answer to financial troubles

The housing market can be a challenge in today’s economy, especially for retirees and senior citizens preparing to move to assisted living communities or in with family members. Questions often arise concerning how long seniors can stay in their homes and what will be done with their homes once assistance with their daily care is needed.

Fortunately, there are ways of overcoming and coping with these financial hardships. On Feb. 24, Carleen Heinrich, a certified reverse mortgage specialist with Wells Fargo Home Mortgage, will present a seminar at Brandywine Assisted Living, offering support and answering questions about reverse mortgages.

Wells Fargo is the No. 1 retail lender of reverse mortgages in the country, and more and more people are taking advantage of that financial option.

“With reverse mortgages,” said Heinrich, “people don’t have to make a mortgage payment until they leave their home as a permanent resident. This is really beneficial if they needed to take equity out, whether it was to supplement their income, take care of health needs or repairs on their home.”

So what exactly is a reverse mortgage? It’s a special type of loan that enables individuals 62 or older to convert some of their home’s equity into tax-free funds. In contrast to home equity loans, clients receive payments rather than making them. These money options can be in the form of lump sum, tenure or line of credit plans.

Some of the benefits of reverse mortgages include clients maintaining ownership of their home and continuing to live in their home, and the loan proceeds can be set to any purpose. The proceeds are not considered income and will not affect social security or Medicare benefits.

“In this economy,” Heinrich added, “especially for people with fixed income, times are difficult. It’s harder and harder to completely live off of Social Security alone, and people are constantly looking for another form of income to supplement these things. They notice that their 401Ks and IRAs are down, and all of a sudden they don’t have these things. They can use a reverse mortgage to pay off their mortgage and bridge this gap.”

Heinrich has been working with Wells Fargo for several years now, and her expertise in the realm of reverse mortgages has brought her to a number of areas in Maryland, Delaware and Virginia.

“I’ve held seminars in the region,” she said, “and, typically, we’ll visit the home of a potential client and do a private consultation. These presentations are great to see if you not only qualify but if reverse mortgage is right for you. It really depends on what’s best for the client.”

Reverse mortgages have been around since the 1960’s but have gained more publicity in recent years with the slumping economy.

“Recently,” she added, “the government stepped in, and programs like the one we have at Wells Fargo have made reverse mortgages much more consumer friendly. It’s really gaining notoriety now.”

Surrounding the perks of reverse mortgages are common misconceptions, Heinrich noted.

“We just want to get more information to the public,” she said. “We’re helping people see if it’s an appropriate situation for them. With the people at Brandywine Assisted Living, we can help this program and get more oriented toward them. Today, you have people going into assisted living, and they can’t sell home in this environment. Reverse mortgages can help those people in this situation. It’s a transition over time, and it gives them the opportunity to make that transition there and take care of their home.”

The seminar will be held at Brandywine Assisted Living, just across from Bayside, near Selbyville, on Tuesday, Feb. 24, from 2 to 3:30 p.m. For more information, or to reserve a spot at the seminar, call Brandywine Assisted Living at (302) 436-0808.