Reverse mortgages are structured to convert home equity into a more liquid resource without selling the home.
Following a 30-year marketing and advertising career, Frederick Schindler started thinking about his retirement in his late 50s. His goal was to find a way to maintain a comfortable lifestyle by leveraging his projected assets and income against his expected fixed expenses, including his mortgage, health insurance, medical expenses and, of course, taxes.
“Even with my investments tied up in good vehicles, I wanted to live on a fixed income,” Schindler explained. “I wanted to leave my investment nest egg alone.”
“The reverse mortgage has provided me with flexibility on a fixed income. That has meant the opportunity to do the kind of things you look forward to in retirement. My house is now my retirement home and is a sanctuary for me.”
For many Americans like Schindler, one of the challenges to managing a fixed income retirement is anticipating expenses that may increase, such as property taxes and school district levies. “Like everyone else, I have to pay my taxes,” he said. “I could foresee a time when increases in those costs would make living on a fixed income problematic.”
Schindler opted to leverage the equity in his home as a resource to draw money as needed to buffer his fixed income. At the age 70, he took out a HECM on his townhome. Schindler selected Dollar Bank as his lender because they like to do business in person.
“It was important to me to look at someone face-to-face as I educated myself to make this decision, too important to leave to a phone call and certainly too important to do on the internet,” Schindler said. “I met with Dollar Bank because of its reputation and proximity. My loan officer Randy Davis earned my respect and trust by helping me understand the reverse mortgage as a win-win option.”
Schindler has found that one of the nicest benefits of his HECM loan is that; unlike when drawing funds from a retirement vehicle such as an IRA, money borrowed with a HECM is not taxed.
“The reverse mortgage has provided me with flexibility on a fixed income,” Schindler said. “That has meant the opportunity to do the kind of things you look forward to in retirement. My house is now my retirement home and is a sanctuary for me,” Schindler said. “Every morning I’m on the deck with my coffee and the newspaper.”
By Nicole Gray