What financial solution could help an elderly couple who owns their home free and clear but struggles with expenses?

A reverse-annuity mortgage is particularly suitable for an elderly couple who owns their home outright but faces financial strain due to ongoing expenses. This financial solution allows homeowners to convert a portion of their home equity into cash without the obligation of monthly mortgage payments. Instead of making payments, the lender pays the homeowner, which can provide critical funds to cover living expenses, healthcare, or other financial needs.

The appeal of a reverse-annuity mortgage lies in its structure; it enables the couple to remain in their home while receiving supplemental income. As the couple is already free of any mortgage debt, they are in a favorable position to leverage their home equity without the stress of additional monthly payments.

Other options, while potentially beneficial in different contexts, do not fit as perfectly. A home equity loan would require monthly payments, which may exacerbate their financial issues instead of alleviating them. A standard mortgage refinance could be less suitable, as it would also involve monthly payments, and it typically requires an existing mortgage to be in place. A short-sale agreement is intended for situations where the homeowner can no longer afford to keep their home; it usually results in the sale of the property at a loss and is not designed to provide financial relief for expenses while retaining homeownership.