Reverse mortgages have many different uses, depending on the needs of the borrowers using them. But whether that means shoring up personal savings or creating additional cash flow during retirement, one use that doesn’t get enough press is how a reverse mortgage can enable retirees to pursue their passions later in life.
“It wasn’t so much for my living expenses; it was more fore the things that I wanted to accomplish with my life,” said Lisa Mayo, 68, who got a reverse mortgage on her West Covina, Calif. home four years.
Mayo’s reverse mortgage experience was recently spotlighted in a Bankrate article, which also appeared in Yahoo Finance this past week.
As an actor, producer, director, writer and teacher, Mayo took a reverse mortgage to free up cash to pursue these passions. She was also able to put away some of the loan proceeds so that she could “do other things with it.”
Mayo, who got her reverse mortgage from American Advisors Group (AAG), said her main concern was whether she would be signing away her house by taking out the loan.
“I wanted to make sure I was making the right decision, for one thing, and my fear was that somebody would take away my house,” she said in the article. “What if I got sick and my daughter wouldn’t be able to pay it? So those were the concerns that I had.”
Mayo’s loan originator assured her that she would continue to retain ownership of her home. As the sole borrower, her decision to proceed with the reverse mortgage was perhaps aided by the fact that Mayo’s daughter does not want to inherit her mother’s house some day.
“I knew that my daughter would not live in my house, and what was the point of me having this house if she was not going to live in it? So I though, well, instead of her spending my money, why don’t I spend my own money?” Mayo told Bankrate.
With friends in their 80s and 90s, Mayo has become somewhat of a advocate for reverse mortgages, telling friends about her own personal experience with the loan and how it has enabled her to do the things that she wants to do in life.
“Live in the now,” she said. “Don’t save it for somebody else who’s not going to really value or appreciate it.”
Read the full Bankrate article here.
Written by Jason Oliva