Finance Retirement with A Reverse Mortgage

Retirement Financed with Reverse Mortgage

Retirement Financed with Reverse Mortgage

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.

Enjoying Retirment with His Reverse Mortgage

Enjoying Retirement with His Reverse Mortgage

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

© 2009 Beth Paterson, Beth’s Reverse Mortgage Blog, 651-762-9648

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link:  http://wp.me/p4EUZQ-9e

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

38 thoughts on “Finance Retirement with A Reverse Mortgage

  1. “One can have a trust, life estate, or receive Medical Assistance, Elderly Waiver or other public benefits ”
    Actually, this statement is slightly incorrect.
    1. if the RM is taken as monthly income, then it is IN FACT considered income and will disqualify the senior for income tested programs.
    2. once the loan is in place and if the senior has to go to a nursing home, Medicaid WILL recover on the exposed equity.

    In the Wayne and Barb example, I would bet that their income was low. And they had no assets except the house. Afterall 80% of all seniors have less that $1500 a month of hard income.
    I would also bet that the would have be eligible for QMB or SLB help on their Medicare (zero premiums, elimination of some co-pays) and probably “extra help” from Part D RX. (eliminates donut hole, $1 and 3 rxs)

    Taking the RM was a very expensive bandaid on a broken arm. They now have paid $7-14k in fees, to use up their equity paying for things that programs are in place to pay for. Medical expenses dont go away as you get older.

    I would estimate that 40% of all RM are inappropriate as a first step.
    I was a speaker at the RM National Convention in San Fran several years ago. The RM agents sat there dumbfounded at the information I provided. Like most product sales people in the Senior Industry, their version of “government programs” is limited to MYTHS about medicaid/medi-cal and nursing homes. FACT: in CA out of 4 million seniors, 1.6 million qualify for the level 1 and 2 of ‘extra help’ from Medicare Part D. This mean that they have income under 1200 a month. That is information provided by the Government.
    (not a marketing group) Yet less than 50% are signed up.

    The solution to ‘high medical bills’ is not a RM. It is being signed up for ALL the proper government programs designed to cover those costs.
    Then and only then should a RM be concidered.

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