What’s a “reverse” mortgage?
Reverse mortgages are one of the most talked-about financing concepts in recent years. In general terms, instead of taking out a loan secured by a home and making monthly payments, a reverse mortgage provides a monthly income or up-front cash to homeowners aged 62 or above, depending on the program.
The real question is how to extract equity from a home at the least possible cost when you want to remain on the property — despite a limited income. In many instances there simply isn’t a good answer. Moving raises discomforting lifestyle issues and owners are unlikely to qualify for regular mortgage financing.
Reverse mortgages reduce inheritances, so perhaps the best approach is to consider an inter-generation plan if possible — adult children chip in monthly to help the parents in exchange for an assured inheritance. If reasonable within the context of family dynamics, the parents stay put, estate issues are resolved, and costs are held to a minimum.
For details, BEFORE signing anything with anyone, speak with an attorney who specializes in elder law. Be sure to ask about wills and living wills for both the property owners and all adult children, and ask about tax implications.
In the interim, do NOT sign paperwork which require you to pay fees to non-lenders for reverse mortgage information and planning. HUD has found cases where consumers have paid thousands of dollars for such extra services. Such information is available WITHOUT COST from reputable lenders.
For more reverse mortgage information, go to: BestReverseMortgage.com.
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