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Laid Off Worker Using Reverse Mortgage To Save His Home

image The Start Telegram published an article about how one senior is using a reverse mortgage to save his home after being laid off from his job as a salesman in the check printing industry for 34 years.  "The last thing I wanted to do was lose my home," he said. "And I didn’t want to depend on using all my savings or depleting my separation payment to pay my mortgage."

Instead, Thomas talked to a housing counselor and started the paperwork for a reverse mortgage, which he plans to sign on his 62nd birthday in August.  Thomas will still live in his house and he will continue to pay property taxes and homeowners insurance.

With payments for principal and interest eliminated, Thomas’ monthly mortgage payment will drop from $1,326 to around $450 — just the amount needed for escrow to pay taxes and insurance when those come due.  "My payments will be so much lower," he said.

More and more Texans are turning to reverse mortgages, said Judith O. Smith, owner of a Fort Worth mortgage company that bears her name. She said she has closed on more than 80 of the loans since the first of the year.

Over the last 24 months, Texas homeowners have borrowed more than $1.1 billion through reverse mortgages from about 200 lenders, said the Texas Association of Reverse Mortgage Lenders. 

Some borrowers who go to Smith for counseling are using a reverse mortgage to avoid foreclosure or to gain cash to pay for such regular expenses as groceries and medicine, she said.

"I’ve seen it be a miracle for some people," she said. "People literally have used it to put food on the table."

The Savvy Consumer: Time may be right for a reverse mortgage

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