Finance options for owner with high equity and low income

[Jon Klaus]

I've been talking with an elderly homeownder who is house rich, but cash poor, and has fairly low income. He wants to stay in the home, but needs more cash for living expenses. He has good credit. What can he do to access home equity besides a reverse mortgage? HELOC? Cash out refi? Other options?

[Theresa Harris]

@Gary Abner  I'll be blunt, they are not living a modest lifestyle if they are short $1500 a month.  A modest lifestyle would be living on $1500 a month.  While your dad may want to keep his motorhome if he still owes $75K on a 10 year old motorhome, he needs to either sell it or sell the house and move into the motorhome.  

Your parents need to sit down and look at their finances to see where they can cut costs and what they can do to get more money (eg sell their home and downsize, get rid of the motorhome, do they have an in-law suite they can rent out).  Historically by the time people are at retirement age, their primary residence is paid for and this allows them to live off less income than when they were working and had a mortgage.