We research, you save.
Got Questions On Rates? (855) 610-2972

Just released: The latest update to HSH's "Home Price Recovery Index" and market analysis

5 important reverse mortgage benefits

Seniors can get big benefits from reverse mortgages.

Financial planner Todd Burkhalter at Drive Planning in Johns Creek, Ga., says he's seen "countless situations" where a reverse mortgage is "a perfect fit" for a senior homeowner. Consider five significant reverse mortgage benefits:

1. Reverse mortgage pays for long-term care insurance

Burkhalter recently recommended this type of loan to a widow in her early 70s who owned a condominium, but wanted to leave cash to her grown children who owned their own homes. The income from the reverse mortgage was used to purchase long-term care insurance, which the woman had wanted but felt she couldn't afford. If she doesn't utilize the insurance, her heirs are entitled to receive a death benefit.

"The reverse mortgage allowed her the freedom to use her retirement accounts for trips and enjoyment with her 19 grandkids while she was alive and leave an inheritance," Burkhalter says.

2. Senior gets monthly income and a vacation

Beth Paterson, a certified reverse mortgage loan professional at Reverse Mortgages SIDAC in St. Paul, Minn., recalls a man in his mid-70s who used a reverse mortgage to make some home improvements that would enable him to remain in his home longer, take a vacation to Yellowstone National Park with his nephew and supplement his income after his wife died and his household Social Security benefit was reduced. Though he and his wife did not have children of their own, the vacation with his nephew had been long-anticipated and was very important to him, Paterson recalls.

3. Reverse mortgage facilitates in-home care

Another Paterson client was a widow in her 70s who was mentally alert, but needed some help with food preparation and bathing in order to remain in her home. Her adult children, a son and a daughter, worked with their mother and Paterson to arrange for a reverse mortgage which was used to pay for in-home assistance.

"Her children encouraged her to get the reverse mortgage so she could stay in her home," Paterson says.

4. Reverse mortgage pays for home improvements

Paterson also worked with a woman who obtained two reverse mortgages, one in Florida and later one in Minnesota.

"She wanted to move from Florida to Minnesota to be closer to her son," Paterson says. "The reverse mortgage gave her some funds to fix up the home she bought and a line of credit for future long-term care needs."

Her home improvements included remodeling an outdated bathroom and refinishing her new home's hardwood floors.

This senior was one of Paterson's younger reverse mortgage borrowers as she was only in her late 60s. With the reverse mortgage in place, the line of credit is available if she needs funds for in-home help, healthcare services or other future expenses.

5. Reverse mortgages help seniors keep their home

Many consider the most important benefit of reverse mortgages to be that they offer seniors the ability to stay in their homes, says Casey Fleming, mortgage advisor at C2 Financial Corp. in San Diego.

Reverse mortgages, also known as Home Equity Conversion Mortgages, or HECMs, allow seniors to borrow against their home without selling it or making monthly mortgage payments. The money from the mortgage can be used for daily living expenses, home remodeling, maintenance or repair, travel, family gifts, elder care or any other purpose.

More help from HSH.com
  • How to Lower Your Property Taxes
    No one enjoys paying taxes. What's worse is the idea of overpaying taxes. Implement these tips to reduce your property taxes.
  • Buying a Home as an Investment Property
    Many of the largest fortunes in America were built on real estate, and buying investment property is still a solid wealth-building strategy. This article covers what you need to know about investing in real estate and how to get financing for an investment property.
  • Better to Buy a New or Used Home?
    If you can afford to choose between a new home and a previously-occupied one, how will you decide? Learn advantages and disadvantages of both choices.
  • 5 Credit Report Errors That Will Cost You
    If you plan to apply for credit, take on a new job or purchase insurance in the near future, there's a 20 percent chance your credit report could let you down. Learn how to find and fight credit report errors before they do serious damage to your finances and your life.
  • Home price recovery index: Which metros have improved the most, least?
    Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peak reached before the crisis?


No Comments

Leave a Comment

Get a reverse mortgage quote today.

Enter your zip code

Please enter valid zip
Please enter a valid postal code