While the question might seem simple, Kelly writes that it can spark critical conversations in senior households, especially when times are tough and cash is tight.
Using one couple as an example, they wondered if a lender with a second mortgage on a property would subordinate its position so a senior could could obtain a reverse mortgage and avoid foreclosure. It turns out they would…
Here’s how the reverse mortgage solved the dilemma:
The couples’ home value was $235,000 and encumbered by a first mortgage in the amount of $140,000 and a second mortgage of $60,000. After fees, the couple was eligible for a reverse mortgage of $171,000. When the reverse mortgage closed, the first mortgage was paid off and the remaining $31,000 brought the second mortgage current and also bought down a significant portion of the balance.