Realtor Daneen Mills of Hollywood, FL is living proof of the benefits of proprietary reverse mortgages. As a condo owner, Daneen knew her $575,000 beachfront condo didn’t qualify for the FHA HECM program, so she Googled non-FHA reverse mortgages and found a program that suited her needs.
Being in the title business for 35 years, attaining her insurance license and then becoming a realtor, Daneen, a planner by nature, is acutely aware of the advantages provided by reverse mortgages. “A lot of people are apprehensive because they don’t understand, but it’s a great product for people with equity in their home. No one wants to think about getting older. But you have to. When you’re young you think retirement is so far away, but it really comes fast,” says Daneen.
Though not yet retired, once her son and daughter moved out on their own, 62-year old Daneen sold the big house in which she raised them and bought a condo on the beach. Nestled between the shore and a Margaritaville resort, Daneen is surrounded by what she loves most: the beach, live music and the simple life. She admits that as someone who works from home part-time, living next door to Margaritaville can be distracting. It’s always five o’clock there, as Jimmy Buffet sings. But deciding to make the move was an easy one. Daneen wanted a place to grow old in. With two bedrooms and two bathrooms, balconies and ocean views from each room, the fully-renovated, 1,400 square foot white-washed condo is age-friendly with wide doorways, a walk-in shower, wood floors and hurricane-safe windows and doors.
Several years ago, Daneen found herself with some costly expenses when her A/C and water heater conked out simultaneously. She ended up running up her credit cards and was paying a high interest rate. She wanted to pay off her debt, avoid a mortgage payment on her new condo, have funds in case of an emergency, and travel while still in good health. And since she’d tapped into her retirement money to buy the condo, Daneen knew her best choice was a proprietary reverse mortgage. She then found a reverse mortgage specialist who was able to put together a loan that catered specifically to her wants and needs. Most proprietary products on the market have a minimum property value set at $350,000. And much like the HECM, they lend based on three factors: age, rate and home value.
Were it not for the availability of proprietary products, Daneen’s only option would have been a home equity loan, which would have rendered similar results but left her with a mortgage payment. Fortunately, proprietary products are making it easier for the niche markets, like condo owners, to obtain a reverse mortgage. Thus, allowing borrowers, like Daneen, to live without credit card payments, the burden of debt, having to tap into other assets—401(k)s and Social Security—and to have the peace of mind an emergency backup provides.
The move to the condo was specifically for easing her burdens as she grows older. As she ages, Daneen plans to remain by the sea, in her age-friendly home, in a safe community where she can walk for groceries for as long as she possibly can. Home equity is her retirement planning tool.