What is an old man do? If the stock market declines or if the living costs are more than expected, years of retirement may be far from the golden years. Celia Mason, a Certified Senior Advisor, works with retirees to develop strategies to address this challenge.
For seniors who own their homes and age in place, a reverse mortgage may be the solution to find some financial relief from removal. "Reverse mortgages give seniors, at 62 years old, cash, a line of credit or monthly income or even a combination of the three, which should not be paid for as long as they continue to live in home. In other words, no monthly payments. "
The loan is repaid when both spouses die or permanently move out. And the money is tax free. "It's a great way for seniors to live more comfortably, have more financial security and even go out and have a good time," says Mason.
"Reverse mortgages had negative connotations for a while years ago," says Mason, "but today under the regulations of HUD (U.S. Department of Housing and Urban Development) older people can not lose their homes or be forced out." Although you can participate in the assessment and their heirs never have more than the resale value of the house. The process is well established, and even includes advice from third parties for the elderly to make sure they really understand what the consequences of carrying out this mortgage.
The number one concern borrowers have is that closing costs can be considerable, especially because of the requirements of the FHA mortgage insurance to guarantee the loan. However, these costs are rolled into the total reverse mortgage loan and the borrower does not have to write a check. "For the loan of these initial costs, the owners have plans to live at home for at least three to five years," says Mason.
While many of Mason's clients get reverse mortgages to cover daily expenses or to cover health costs, some take these loans only because they want to use the money for something important or meaningful to them.
Mason has clients who want to pay your grandchild's college expenses or to take this long dream of traveling around the world. "Some customers specifically want to make a charitable gift to the funds before they die, or just want to be able to spend the money as they wish, while they are alive, instead of leaving it for someone else to happen," he explains.
Mason also cites others who have used the funds for sophisticated purposes, such as buying a property generating rental income or purchasing a life insurance policy for estate planning purposes.
"Reverse mortgages are really a great option for older people, especially in communities such as those here in the Bay Area, where home values have skyrocketed."
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