Hi r/RealEstateAdvice, I’m hoping for some advice on how to help my mom keep her home and retire without constant financial stress. We just pulled the property out of foreclosure and got the mortgage current, but the numbers still feel tight for the long haul.
Backstory: This was the house she grew up in, was owned from 1959-2016 when her mom passed away, and the current mortgage was part of the estate settlement between her brother and their estranged half brother who came and took 1/3rd of the estate due to grandma not having any estate planning. She lived here with her brother until he passed in 2021 and left it to her. The foreclosure process was a nightmare but I was able to pay it up to current this last month, now we're fully reinstated and looking into our options (if any) moving forward.
Current situation:
- Mortgage balance: $163,000 (roughly).
- Monthly payment: $1,621.59 at 3.625% fixed interest
- Current property value: ~$559,000
- Rental income from the property: $1,400/mo (1 Adult Roommate & 1 Adult Daughter Paying Rent)
- Mom’s only other income: SSI $991/mo
- She turns 63 this year, is fully disabled, and partially blind
Right now the rent + SSI covers the mortgage with a little left over. But we want to get the payment low enough that she can handle it even if the tenants leave. The goal is long-term peace of mind so she isn’t one bad month away from trouble in retirement. We’re wondering if there are better options now that the loan is current, especially given her age, disability status, and the strong equity in the home:
- Refinance into a new conventional loan with lower payments?
- Any kind of loan modification?
- Home Equity Agreement / Home Equity Investment product?
- State programs for low-income, senior, or disabled homeowners?
- Reverse mortgage (now that she’s approaching / turning 63)?
- Or is the current 3.625% rate basically the best we’ll ever see and we should just focus on budgeting, building reserves, and keeping the rental going?
I don't have any experience in real estate, and the foreclosure process was 15 months of hell. Now that it's finished I'm just trying to get ahead of things and see if there's anything else I can do, applications for assistance etc... Or even possibly sell & use the equity to find her a long-term living situation.
Appreciate any thoughts/help here!