A parent or loved one may be considering a reverse mortgage for the following reasons:
- House rich, but cash poor.
- Has other assets available but wants to postpone or eliminate liquidating to avoid or limit market losses or taxation.
- Is not concerned with passing the equity in their primary residence to their heirs.
- Is comfortable leveraging their residence in exchange for cash flow or access to cash in the form of a line of credit.
- A reverse mortgage can be obtained during a pending conservatorship proceeding (requires court approval under most circumstances, with specific language in the order – contact us for more information).
Some advantages of a reverse mortgage to consider:
- Turns a non-performing occupied asset into liquid monthly payments, lump sum payment, or line of credit accessible at any time for life.
- Eliminate existing mortgage payments, or purchase a new residence with no mortgage payments.
- Source of income to rely upon during which time other investments can recover from market losses.
- Proceeds are not “income” for Social Security or Medicare qualification purposes.
- Converts equity into cash available to pay for in-home care to live out life in the comfort of home.