FARMINGTON, CT (WFSB)
The financial impact on retirement accounts has been devastating, leaving some unable to make payments.
Reverse mortgages are in demand these days and they’ve helped one local family.“The program gives her the necessary funds to stay in her home instead of dipping into her savings,” said Stephen Harris of Farmington.
Stephen Harris was worried about his mother losing her home. Like most people, Ellen Harris’ retirement account has dropped significantly since the COVID-19 outbreak.
“The best move for her was to look at the reverse mortgage program,” Stephen said.
Reverse mortgages give homeowners 62-year-ols or older a line of credit. Families can use it to pay for home healthcare, but many are using it to pay taxes.
“They are calling us saying, ‘let me do a reverse mortgage on my home and then I’ll pay myself back once things recover,’” said John Luddy.Mortgage lender John Luddy is working with the Harris family. With a reverse mortgage, you still own on your home.
As long as you pay your homeowners insurance and taxes, you line of credit grows. If the homeowner passes away, the money has to be paid back by the estate with minimal interest.
“You can take monthly checks and you can put more money in the line of credit,” Luddy said. (You can make any payment at any time, even interest only; every pennie of every payment, principle and/or interest increases the line of credit penny for penny.) ...added by Jay
Stephen has lots of stress with helping his mom and trying to comfort his brother who is in the hospital struggling with the coronavirus. His brother is a New York City Police officer who served his country on 9/11.
“He was one of the first responders that say,” Stephen said.
The coronavirus has certainly taken an emotional toll and a financial one.
Small business owners are also using reverse mortgages to keep their businesses from going under.