Has anyone figured out an alternative to a reverse mortgage for a cash strapped parent?

[Anonymous]

Anonymous wrote:1. Is the best option.

What he wants isn’t really relevant. He can’t afford his house if he doesn’t have the income to replenish his savings and pay for his other expenses after paying off the loan.

He made his decision when he decided to live above his means during his working years.

This is NOT your responsibility or your fault. Say that every time you need to remember.

Thanks. I do know this but it still helps to hear it. Back when he stopped working at 62 everyone (including my mom) told him it was a bad idea and his SS was going to be way lower for life if he took it then, but he didn't listen to anyone. He knew then that he still had the HELOC (and still had them primary mortgage then too.) I guess his plan was just to let my mom deal with it? Their relationship was....complicated, and then she passed away prematurely.

[Anonymous]

You could consider doing a family reverse mortgage, if you can afford it. Make sure you get an attorney to help set it up.

[Anonymous]

He needs to move to a 1 bedroom

[Anonymous]

Anonymous wrote:He needs to move to a 1 bedroom

OP here. I get what you are saying, but he'd have to pay rent then, which would cost easily as much (if not more) than just making reasonable payments on the HELOC. I guess the big difference is that if he were renting he could just spend down his assets including the proceeds from the sale of the home. He needs to work part-time and/or charge a more reasonable rent to his "renter" friend if he truly wants to keep the house. I think he is being really short sighted but that is nothing new. Delayed gratification was never his thing. Money has always burned a whole in his pocket. We were not financially stable growing up.

[Anonymous]

How much owed on HELOC

[Anonymous]

Anonymous wrote:How much owed on HELOC

Roughly equivalent to his cash/stocks - around $30k.

[Anonymous]

Refinance it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:He needs to move to a 1 bedroom

OP here. I get what you are saying, but he'd have to pay rent then, which would cost easily as much (if not more) than just making reasonable payments on the HELOC. I guess the big difference is that if he were renting he could just spend down his assets including the proceeds from the sale of the home. He needs to work part-time and/or charge a more reasonable rent to his "renter" friend if he truly wants to keep the house. I think he is being really short sighted but that is nothing new. Delayed gratification was never his thing. Money has always burned a whole in his pocket. We were not financially stable growing up.

Moving makes no sense. If he is able, work.

[Anonymous]

Anonymous wrote:

Anonymous wrote:How much owed on HELOC

Roughly equivalent to his cash/stocks - around $30k.

Maybe see if the bank will refi the heloc based on his SS income. Seems like the payment should only be a couple hundred a month. How much is his monthly SS?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How much owed on HELOC

Roughly equivalent to his cash/stocks - around $30k.

Maybe see if the bank will refi the heloc based on his SS income. Seems like the payment should only be a couple hundred a month. How much is his monthly SS?

I’m not sure but I think around $1700.

[Anonymous]

What will he do if the house needs a big repair (roof)? How is he paying the taxes? I feel like a reverse mortgage is avoiding the issue. How old is your father?

[Anonymous]

Anonymous wrote:

Anonymous wrote:What will his monthly payment be, on the payback? Can he use his $30k to slowly pay down, keeping the bulk of it for home repairs?

If we are not able to refinance to anything better, I think it's going to be about $650. So yes the $30k could buy him a couple of years. I think the interest rate was/is high because I think it's variable and tied to the market. My mom handled their bills prior to her death. Their original plan was once the primary mortgage was paid off, to take that same payment and put it toward paying off the HELOC. But my mom passed away before that happened and my Dad did not feel that he could afford to do that with the loss of her income.

Could he get a part-time job? If you're able to refinance to bring the payment down a bit, it seems doable to at least mostly cover it by just working a few hours per week.

[Anonymous]

Can you not cosign onto a new mortgage/Heloc? Alternatively, could he sell part/all of the house to you?

[Anonymous]

It sounds like your Dad is not considering his own best interests— roommate not paying market price, desire for reverse mortgage.

How is he doing in other areas? Does he seem sharp and on top of things?

If you’ve noticed other changes, I would worry about his mental health in light of poor decision making. Is he seeing a doctor regularly? Even depression can lead to making bad decisions. Please consider getting him checked out.

[Anonymous]

OP, not to sound morbid, but how old is he and how is his health? Is he likely to live a long time? If he’s unwilling to sell and downsize, and renting doesn’t make finance sense, I’d just have him use his $30k in assets to pay the thing down on a monthly basis. This leaves him a chunk of change to take care of repairs and other things that pop up. Once the well dries up, he will have more options for assistance programs, especially for home repairs.

If it were me, this is what I would do. I would also immediately get his name on low-income senior housing, because it’s likely he will eventually run out of money and need a housing option that works with his SS fixed income. It sometimes takes about four years to be approved for housing.