Estate planning, protecting one’s investments, traveling, and supplementing one’s income are desires of retirement Large monthly payments, high interest rates, foreclosures, home repairs and modifications, and medical expenses can all be issues facing seniors. A solution for those 62 and older to finance their retirement no matter what their circumstances may be a reverse mortgage.
A loan with no income or credit qualifications and no required monthly payments can provide tax-free cash for whatever one wants or needs.* (See below for updates implemented in 2015.)
Larry and Carol did a reverse mortgage so they could pay off their current mortgage and eliminate the payments. Not having to make payments, Larry was able to retire, a much awaited and deserved event at the age of 70. With $45,000 remaining in their line of credit, which grows so more money is available to them in the future, and a good estate plan, they can live comfortably without financial pressures.
Wayne and Barb were having financial problems because of high credit card debt and medical expenses. Even though they don’t have remaining funds, with their reverse mortgage their cash flow has improved because they don’t have to make the monthly payments. With a plan and a budget, they thanked us stating, “The reverse mortgage has helped us in our time of need to change our financial situation. It has made a big difference in our lives.”
Working with an estate planner, a reverse mortgage helped Mary plan her retirement so she has funds for emergencies, medical expenses, traveling, leaving something for her heirs, and enjoying life without being dependent on her children.
A reverse mortgage is a loan similar to a conventional mortgage but with different terms to help seniors remain in their home with security, independence, dignity and control. The borrowers keep the title to the home and are responsible for taxes, insurance, and maintaining the home. Unlike a conventional loan the low-interest accrues, increasing the balance with no payments due until the home is no longer the primary residence of the borrowers. In addition, the reverse mortgage is a non-recourse loan which means there is no personal liability to the borrowers or their heirs for repayment if they our their heirs are not retaining ownership. Remaining equity goes to the borrowers or their heirs.
One can have a trust, life estate, or receive Medical Assistance, Elderly Waiver or other public benefits and use the reverse mortgage for estate planning. Not considered income, Social Security and Medicare are not affected.
It may sound too good to be true, however, it is a safe way to access cash for retirement and remain in your home as long as you choose.
As Myrna stated, “It is really great not to have to be concerned about where the money will come from for my long term care insurance policy payment and emergency repairs. It has relieved us of a great deal of stress and makes grocery shopping a lot easier too.” Reverse mortgages have helped many finance their retirement, how can it help you?
*In April 2015 a Financial Assessment was implemented to determine borrower’s ability and willingness to pay property taxes and insurance into the future. This safeguard help make the reverse mortgage more sustainable so borrowers can remain in their home.
For more uses of the reverse mortgage, read
- Know A Senior Who Wants Security, Independence, Dignity and Control? A Reverse Mortgage May Be The Answer!
- Reverse Mortgages Answer Prayers
© 2009 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648
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