Clients: 94-year-old male with in-home nursing care needs, and his 78-year-old spouse.

Client’s Initial Goals (Spring, 2024): To be able to continue aging in place together, while getting the necessary in-home care required.

When we began working with our prospective clients in the Spring of 2024, they had no working knowledge of the reverse mortgage program. They were referred by their Elder Care Attorney to us, in the hopes of finding a solution to their present and future in-home care needs. The bulk of the in-home care needs for the 94-year-old male had fallen on to his 78-year-old spouse. She was struggling to keep up with these needs, both physically and financially. The couple also have 2 adult children, who were both highly skeptical of reverse mortgages in general.

Our initial meeting was with the spouses only. After getting the particulars of their living and financial situation, we are able to begin the deliberate process of determining whether this program MIGHT be a good fit that aligns with both their personal and financial goals. At the time of our initial meeting, the couple owed $250,000 on their home mortgage, with an estimated home value of $1.3 million. They did have credit card debt, with 5 accounts adding up to $48,000 in total. Part of the reason for this credit card debt was funding the male’s in-home care needs. They both receive retirement income (Social Security, Pension), but their budget was extremely tight. While having a good amount of home equity and excellent credit, they were in a potentially precarious financial position with their credit card debt. Along with that, if there was an unexpected health expense (or an increased need of in-home care), their financial position could turn negatively rather quickly.

As we explain to prospective clients, our goal with the reverse mortgage program is to provide an educational presentation, in order to help them make an informed decision that best fits their needs. This is not a ‘one size fits all’ type of program. But in the correct scenario, it can be a highly effective tool to utilize.

While we both advised a reverse mortgage program could be a viable option for them, it was essential to include their adult children in the process. We stress to prospective clients that it’s important for all members of the immediate family be involved in order to provide education, and answer questions along the way. Our practice of including encouraging our prospective clients to include their immediate family members can potentially lead to short-term challenges, based on differing opinions and agendas. However, we strongly believe that this is the best way forward to help the family achieve their long-term goals. In this specific case, the differences of opinion between the seniors and their adult children initially led them to the decision to hold off on a reverse mortgage at that time. We continued to stay in contact with the entire family to answer any additional questions they might have.

Fast forward to Fall 2025:

Additional, unexpected health events have arisen. A greater level of in-home care is needed. The client has maxed out the 5 credit cards, and opened up 3 additional, bringing their total owed to roughly $100,000. This massive debt is costing them approximately $3500 per month and isn’t making a dent in the balances. The financial situation that once seemed manageable, now feels like quicksand, further adding to their stress and anxiety.

Solution:

The family again reached out to us, but this time with a better understanding of how the program could benefit them and a greater urgency to stop the hemorrhaging of their money every month. With everyone now on board with the need for the program, we met with them face to face again to discuss which of the reverse mortgage loan programs would be best for their specific situation.

We presented 3 program options to the family. The first two were the standard HECM (Home Equity Conversion Mortgage), with the option of taking either the adjustable-rate program with the attached line of credit to make additional future cash draws, if needed, or the fixed rate program, which does not come with the line of credit. While the standard HECM (adjustable or fixed) is the most popular reverse program out there, it is capped by FHA’s loan limits. As reverse mortgage lenders lend a percentage of the home’s appraised value, based on the age of the youngest senior on the loan, if the appraised value of the home is significantly higher than county’s loan limit, the percentage is still based on that loan limit. This can limit the available funds to the homeowner.

Taking their current mortgage balance, combined with the 100K in credit card debt needing to be liquidated, then applying the loan limit on the traditional HECM program, only allowed for access to enough funds to pay off about half of the credit card debt. As a result, the seniors opted to go with the Platinum Reverse loan program. This program is not bound by the FHA loan limits, and therefore allows the percentage to be lent to be based on the true appraised value of the home. This choice gave them all of the funds needed to eliminate the credit card debt in its entirety.

The elimination of the current mortgage payment, and the monthly credit card payments saved the seniors a little more than $5,000 per month, which provided breathing room for them and the ability to better afford the needed increase in in-home care expenses. The seniors also have access to a $350,000 line of credit for future use should any unforeseen medical events or other needs arise. A big advantage of the line of credit is that the unused portion will earn interest for seniors, thereby strengthening their equity position.

In summary, sometimes the decision to enter into a reverse mortgage can be a lengthy process. More than 18 months in this case. It takes patience, understanding, and compassion to not only the seniors, but to their family members as well. We believe that our approach of educating rather than trying to sell them on the loan program was the difference here. We never waivered from that and never pushed them into a decision that could have made them feel rushed or uncomfortable. We earned their trust. Over time. That trust is the foundation for everything we do to help our senior clientele age in place.