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FINANCE: Mrs. Ruby’s Victory |
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Written by ROBERT HENDERSON
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 Today, we are discussing a story that starts out appearing to be hopeless, but ends in victory.
The main reason I felt the need to share this story is because there are so many others (millions) who are in the same situation but who have neither the courage nor the willpower to reach out and ask for help.
For the few who want help, many don’t know to whom or where to turn, often relying on a friend or family member who’s privately going though their own financial wars.
So pay attention: This could one day happen to you.
About a month ago, I got a call from a lady by the name of Mrs. Ruby. Mrs. Ruby is about 78 years old, a widow who has lived alone in a three-bedroom house in South Miami for the past 50 years.
She has five grown children, all of them over the age of 50, and she’s struggling to make ends meet. She has 15 grandchildren and 30 great grandchildren, all of whom visit her during holidays.
This may sound good if you are viewing the situation from the outside looking in, but on the inside, grandma is in serious financial trouble.
Mrs. Ruby is living on a fixed income. Her home is paid off, but property taxes and insurance costs have skyrocketed in the past few years.
Mrs. Ruby borrowed all she could on her credit cards (the creditors are now calling), and was facing foreclosure on her home within 60 days.
I asked her to come to my office, but she said she was without transportation and everyone was too busy to bring her from South Miami to my office in Miami Lakes.
After realizing the urgency of the situation, I decided to pay Mrs. Ruby a personal visit to offer her some sort of assistance. As I entered her home, I couldn’t help but notice how badly her appliances (stove and refrigerator) and kitchen cabinets had deteriorated over the years.
I noticed water stains in several areas of the ceiling, which usually indicates possible damage to the roof.
The place she called home was in need of a serious makeover from the inside out.
At that point, I knew exactly what she needed: A reverse mortgage.
Why a reverse mortgage?
Before I explain why, let me brief you on what a reverse mortgage is. A reverse mortgage enables older homeowners ( 62 + ) to convert a part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment.
The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you. You have the option of getting a lump-sum payment, or you can get monthly or quarterly payments sent to you to do as you please.
Why wait until you’re dead to use all of that built-up equity in your home? You can have your cake and eat it now.
What good is having a home with no mortgage, but living broke and in misery?
Trust me, if you don’t use it, as soon as you’re dead, your grown kids will! Good, unselfish children want to see you living well while you’re alive now. There is no sense in spending lots of money on you when you’re dead.
When was the last time you’ve been on a cruise? Or have you ever? Remember, you can’t take anything with you when you die. Now is the best time, especially since real estate values have skyrocketed in the last 6 years.
We now see some of the values dropping, and remember: If a hurricane hits, all bets are off anyway.
Remember that old saying: “A bird in the hand beats two in the bush.’’
Robert Henderson Jr. is a Certified Financial Planner and author of The New Underground Railroad. He can be reached at 305-825-1444 or www.newundergroundrailroad.com.
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