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Thinking About Reverse Mortgage

by Cheryl Ellis, Staff Writer

(Page 2 of 2)

Upgrading the home is one way of “making” money with the reverse mortgage.  Changing floor schematics to allow for walkers or other ambulation products will help in the present and be a selling value for the future.  The safer the home is, the better the resale value.  Hurricane shutters will allow individuals to ride out storms in their homes, unless they are in a mandatory evacuation area.  The shutters will still protect the home whether it is inhabited or not, and can be used if extended visits are made to keep the home secure.

The family who cannot stretch their income to pay for home health aides may find that a monthly disbursement will cover these costs.  Again, speak to your tax advisor about how this affects your loved one’s taxes and if anything can be written off at tax time. 

The reverse mortgage must be paid back once the home is no longer the principal residence of one or more of the borrowers.  At the point where it is no longer the main residence, the loan may be paid back out of pocket, or from the proceeds of the home’s sale. Anything above the loan amount belongs to the homeowner or their heirs. 

That’s why discussing all aspects of the option with family and a financial representative is important.  If you are the primary caregiver and other family members are in conflict with this idea, remind them of the costs to take care of a loved one.  If you are bearing the major responsibility of caregiving and are the legal representative, you are the one in charge of making the decisions.  Reluctant family may be reassured by some instruction. Depending on the wishes of your loved one, the will can reflect the appropriate distribution of any finances left over from the reverse mortgage repayment.

Caregivers must remember to entertain all options when considering a reverse mortgage, including how the loan will be repaid.  Programs that educate caregivers are designed to explore the pros and cons of reverse mortgages, and offer alternative options.  The reputable mortgage company will also outlay the facts rather than “sell” you on the loan.  Their information should match up with what you learned from education programs like AARP’s.

 
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