Jim and Shirley had done what many people hope to do in retirement. They’d saved, invested, worked with a financial advisor, and reached their mid seventies in good health. When the big house became more than they needed, they sold it and paid cash for a new condominium. Jim didn’t want another monthly mortgage payment, and the move seemed to check all the boxes.
Then they looked at the condo through a different lens. They loved it, but it wasn’t ready for the years they hoped to spend there. Making it comfortable and suitable for aging in place would take money, and much of the cash from their previous home was now tied up in the condo.
Shirley had already made one house beautiful for its next owner. She wasn’t interested in doing that again. This time, she wanted to enjoy the improvements herself.
The next question was where the money would come from
They could turn to their investments, but those assets were already arranged with their advisor around their retirement plan. Before changing that plan, they remembered a seminar Richard had led about reverse mortgages nearly a year earlier. They called to see whether the equity in their condo could help.
Richard welcomed that conversation. They had a specific goal, a home they wanted to keep, and a reason to consider another funding source. He could look at the loan in the context of the life they were trying to build.
After reviewing their situation, Richard helped Jim and Shirley arrange a Home Equity Conversion Mortgage, or HECM, line of credit. Their financial advisor supported the approach, and their children were on board. Their $650,000 condominium supported a $300,000 HECM line of credit, giving them a way to fund the improvements and keep additional credit available.
They used the house to improve the life inside it
Jim and Shirley drew $100,000 from the line to remodel the condo for their plans to age in place and make it a home they’d enjoy. The remaining credit stayed available for future needs. They were able to leave their existing investments in place rather than use them to pay for the project.
The payment structure mattered, too. The HECM didn’t require monthly principal and interest payments while they met the loan terms. Jim could keep the feature he’d wanted from paying cash, while they accessed some of the equity they’d put into the property. Like any other mortgage, they still owned their home.
For this couple, the benefit was tangible: a home better suited to their next chapter, investments left in place, and additional borrowing capacity available if they needed it. Their advisor and family could see how the pieces fit together.
Could the same idea help you
Perhaps you’ve paid off your home and would like to update it before stairs, bathrooms, or everyday tasks become difficult. Maybe you’ve downsized, only to discover that the new place still needs work. Or you have savings, but you’d like to explore using some home equity before drawing from those accounts.
A HECM line of credit can give an eligible homeowner age 62 or older access to funds as needed, up to the available credit. You don’t have to draw the entire amount at once. That flexibility can be useful when improvements happen in stages or you want a reserve for later expenses.
It’s still borrowed money. The loan has closing costs, and interest and mortgage insurance accrue on the outstanding balance, generally increasing what’s owed over time. Borrowers must keep the home as their primary residence, pay taxes, insurance and applicable association charges, and maintain it. Independent HECM counseling is required, and condominium eligibility needs to be checked early.
Richard will put those details alongside the benefit you’re seeking and compare the choices. Your financial advisor and family are welcome in that conversation, just as they were for Jim and Shirley.
If you like your home but need it to work better for the years ahead, talk with Richard before you start moving money around. He can show you what a HECM line of credit might make available and help you decide whether it fits. Call or text Richard at 404-313-9785, or email richard.mcwhorter@ridgereverse.com.
Richard W. McWhorter, NMLS 1618644. Ridge Reverse, powered by Amerifund. Equal Housing Opportunity. Information is subject to change. This isn’t an offer of credit or a commitment to secure a loan. Case figures reflect a past transaction. Current proceeds and terms depend on rates, program rules, property eligibility and individual circumstances. This material isn’t from HUD or FHA and hasn’t been approved by any government agency.