Mortgages and Aging... An Epic struggle: Part 3, Flow Flow Flow the Cash

This section is fairly self explanatory and deals with what Lenders want...

The main problem lenders have with seniors is the lack of income to repay the loan.  A lot of times there are not many options to help them get a new income stream.  The worst is when their pensions are drying up and Social Security isn't really helping that much.

So how do we alleviate this pain?

That's tough... I actually hope to get some ideas from my reading audience....

The biggest thing for this situation is preparation.  Financial Advisors espouse the idea that they need to get to you as early as possible and set a budget and a plan in effect for later in life ... the problem is that most people aren't using them nor are they following that logic. 

A plan needs to be set in place and understood by all in order to get SOME money coming in and flowing through to pay a small annual income...even if it is reinvested somewhere else, the flow of the money is what proves that the person can and will be able to afford to repay the monthly mortgage.  The sooner the plan is put in place, the better. 

There are no tricks and no deception to this... a 75 year old that has been retired for 10 years isn't going to strap on his trusty green visor and start accounting again... but that doesn't mean that there is no income to be had.

• I've seen consulting and freelancing help out. 
• I've seen people simply shift monies around from a CD to an Annuity.
• I've seen IRAs moved to Self-Directing IRAs in order to invest in real estate and pull off passive (tax free) rental income.
• I've even seen kids that just need a little friendly, family workforce hire mom and dad to work for them part time.

The hardest issue to fix in this whole series is Cash Flows.  For some, there are no good answers. 

How do those who don't have the money get help??

Co-Signing

• "UGH... but my daughter could't"
• "Her Husband wouldn't let her"
• "He shouldn't have to worry about this"

Isn't it the next generation's responsibility? Didn't YOU cosign on their first house? Didn't you help them out?

It's a tough place to be, telling someone that their kids have to get involved.

Cons are that they've maybe lost some privacy - and some dignity along with it.  Also, this does put a burden and liability on the children.

Pros are... well, it gets done!... it is probably going to be a better rate... and it can actually create a big benefit when it smooths out estate planning.  A house that already has your kids' name on the deed is a whole lot better prepared for inheritance! 

For planning like this, I ALWAYS prefer to work with a Real Estate or an Estate attorney to make sure everything is done properly. 

Here are Links to the Other Segments:

1. Introduction
2. Credit Issues for Seniors
3. For HELOC's Sake
4. The Cash in the Mattress vs The Cash in the Walls
5. If you've got it... Plan it!
6. As a last resort...