When does a reverse mortgage make sense ?
Julie: 87 years old  •  $0 mortgage  •  $1.1M home value
When Julie was 60, she worked with her family to set up a Power of Attorney which designated her daughter, Francine, as her POA. As Julie aged, she experienced cognitive decline, which increased the level of care she needed. Julie expressed her desire to stay in her home, so Francine looked into in-home care options.

Although Julie didn’t have enough income and savings to cover the in-home care costs, she had paid off her mortgage and built a significant amount of equity. Because of this, Francine decided to see how a Reverse Mortgage could help pay for her mother’s in-home care. After speaking with her financial advisor and a mortgage broker, Francine determined that a Reverse Mortgage was the best solution to paying for Julie’s care.

Since Francine was established as Julie’s Power of Attorney before her mother’s cognitive decline (and she had doctor’s letters stating her mother was competent when designating her as POA), Francine was able attend counseling, sign the 1009, and obtain the loan on her mom’s behalfJulie was able to stay in her home and get the care she needed.
Smartfi Note:  In this scenario, Francine was able to show that her mother established the POA when she was able to understand what the document was, what it did and what she was approving. This is important when it comes to a now “incompetent” borrower who has an appointed POA signing on their behalf.