Reverse Mortgage Could Help Seniors
Thursday, August 13, 2009 at 10:12 AM
My husband and I are in our mid-'40s but already we are looking
forward to retirement. One reason is because we moved right down the
road from my retired parents who have shown us just how much fun two
old folks could have. Both are in relatively good health and enjoy
many different activities. But just this past year they've decided to
stop their annual vacation to St Maarten where they met up with
long-time friends for a week of celebration. Mother suffered a blood
clot that blocked circulation to her leg long enough to cause some
permanent damage. My father was also diagnosed with Parkinson's.
While they're fortunate enough to have a sufficient pension and good health insurance, I could foresee a time when their daily living expenses could greatly increase. Their health problems may one day require daily nursing care. I've told them that since they can't take it with them when they go they should plan on spending their resources on themselves.
One option to cover any increasing expenses would be a reverse mortgage, which allows a senior to get monthly payments based on the value of their home but they would continue to live in their home.
Reverse mortgage payments are tax-free and borrowers do not have to pass the credit checks associated with conventional loans. The money can be used for medical expenses or any other purpose.
This option is not for everyone. Here's a link to a reverse mortgage calculator to help decide if this type of loan would be feasible. While they may never need to take this option, I personally would not hesitate to tell them to take this step if they were having trouble meeting their expenses. The idea that my parents would go without needed equipment or medical care is much more distressing to me than a dwindling inheritance.