Home ownership, once that safest of safe havens, has made an unhealthy U-turn in recent years, flipping many consumers upside down financially, leaving seniors, those with fixed incomes, particularly vulnerable.

I watched the residential real estate boom and bust of the past decade firsthand. I had a bird’s-eye view, covering real estate in Southern California from 2000-2008. Too often, people stretched beyond their means and nabbed ridiculously dicey loans to get them in the home of their dreams.

It didn’t help that loan officers with an eye on high commissions were more than happy to prime the pump and rubber stamp another questionable loan proposition. To top it off, many consumers began using their mortgages like ATM machines, taking out lines of credit for that new car, a European vacation or whatever might float their boat.

As with most bad decisions, it seemed like a good idea at the time. Hey, home values were through the roof. Why not take advantage? They could always sell their house for twice what they’d paid for it, right? But then the rollercoaster ride shifted gears, only it was one perilous drop that may have flattened out in some markets, but has yet to take that next rise in value to get people back above water.

With this deflated housing market staring retirees in the face, many of whom were looking to cash out and downsize, we reached out to a handful of seniors to get an idea of their personal mortgage situation. Following are highlights from our correspondence … and it’s good to note that not everyone bought in to the real estate gold rush. Many kept their feet on the ground and continued paying that existing mortgage off, a month at a time.

 

What is the current status of your mortgage?

What mortgage? No, I’m just kidding! We paid that thing off some time ago and what a relief that was. Not like it was that much—we have been in the house for 39 years—but it’s just nice not to have to worry about it anymore. Not many people own their houses free and clear these days. We are very fortunate that we were able to pay it off early and save a little bit on the interest, too.

Edward, 74

Stowe, Vt.

 

When the recession hit, our finances dropped dramatically. We lost—oh, I don’t even want to think about it. It gives me heart palpitations every time I talk about it. We made some very foolish investments, just say that. Anyhow, we were struggling just to make ends meet, so we looked into a reverse mortgage. It was not something we did lightly—we had spent so many years putting money into the house. To suddenly start taking it out took some getting used to. But in the end, we decided it was the best option for us.

Sylvia, 69

Vero Beach, Fla.

 

I just did my second refi and got a great rate, 4 and a quarter, which I’m trilled about. I had refinanced in 2009 when I thought rates were about as low as they could go, but this is even better. My payments weren’t too bad even before the first refi because I’ve been in my house for 15 years. But when you look at how much you save over the life of the loan with just a little drop in rates, it makes a heck of a lot of sense. And the payment’s lower, too. I guess if they keep going down, I’ll refinance again.

Matteo, 67

Ridgefield, Conn.

 

We are okay on our mortgage right now, but there was a point there when we were almost upside down. It was getting close. We downsized in early ’06, basically right as the housing market was starting to peak. If we could do it all over, we would have rented a place for a couple more years and bought at the bottom. C’est la vie!

Helen, 77

Half Moon Bay, Calif.