A couple in their seventies came to us for a financial review. They each had pensions and were still working part-time because of a mortgage and a HELOC that they had taken out on their house in order to provide funds to help out their daughter. The resulting interest on the two mortgages constituted one-third of their annual expenses. We recommended a home equity conversion mortgage (HECM), also known as a reverse mortgage. Working with a HECM specialist, they were able to roll their two mortgages into the HECM, eliminating their monthly mortgage payments and also providing an extra source of cash during their retirement. The client later told us that it was “the smartest financial decision he had ever made.”
