Did you ever think of your house as a financial safety net?
I read a post this morning on Gigi Hawaii's blog, in which she explained that owning a home is about to save her life, so to speak.
She writes, "We plan to apply for a reverse mortgage next month... If the reverse mortgage goes through, we will pay off our two mortgages and David's car loan, thereby saving $3,000 per month. ... We have no choice but to do this. When he was
demoted in July, David had a $23,000 pay cut. We have been struggling
to meet our financial obligations ever since. With a reverse mortgage,
we will be able to breathe a sigh of relief. Thank God, we own a house.
Where would we be if we were renting?"
The answer to her question is probably - on welfare. But yes, Thank God she and David saved their money, paid their mortgage, worked hard, and as so many lucky Americans do, they bought a house. All those years of faithfully making payments, being financially responsible, and pursuing the American dream are about to pay off in the form of reverse mortgage payments for the rest of her life.
In a reverse mortgage, the bank pays you the equity on your house as a monthly payment, and in the end, they get the house (unless you refinance or sell with equity.)
David and Gigi are not lucky, they were wise. They were responsible. They are fortunate and will reap the seeds of their financial sowing. Good for them.
Now they can continue to enjoy beautiful Hawaii sunrises like this, without financial burden. Pic provided by bytemarks.org.