Juanita Shultz has lived in her rural Johnston County home for 17 years. She designed the house with a back deck just a stone's throw from the Neuse River.
At 75, Shultz is a widow, whose social security income will not cover the costs of some pressing needs.
"Well, it's coming to the point where my house needs maintenance. I need a new roof and the siding is starting to go bad," she said.
Shultz appears to be the perfect candidate for a reverse mortgage. A reverse mortgage is similar to a home equity loan, but there is a slight difference. Instead of the borrower making payments to the lender, the lender makes payments to the borrower. Terms can include a lump-sum amount, a line of credit or a lifetime of payments that are tax-free.
"What it is designed for is to enable people to borrow on the equity they have on their home," mortgage leader Heather Sirgany said. "It's actually not considered income. It is proceeds of a loan, so it is not taxed."
Shultz, who is busy removing the old wallpaper from her bedroom, said she will take the line-of-credit option.
"So if I need it, I've got it and if I don't need it, I'll just leave it there, so my children won't have so much to pay back," she said.
A reverse mortgage does have some drawbacks. There are fees to pay and mortgage insurance is required, so experts say it is best to get some financial advice before pursuing a reverse mortgage. More information on reverse mortgages is available to senior citizens from your local AARP.
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