With our current economic challenges, those of us looking forward to retirement need to be well-informed about our financial needs in coming years. And not only pre-retirees, but individuals already in retirement need to be wise to the changing economic environment. The good news is there are trained professionals who keep abreast of changes in the current economy, changes in laws and changes in government programs for the elderly. Professionals in this field are equipped to handle everything from help with retirement savings accounts, investment advice, guidance on government programs, estate planning or even new funding options such as reverse mortgages. A little planning prior to retirement will allow you to maintain your current lifestyle; whereas, a lack of planning may require you to live on an extremely tight budget. For those already retired, taking time right now to deal with financial problems instead of waiting for a crisis to happen is well advised.
A large number of retired individuals feel that they have planned well for the future only to find that rising medical costs, damage done to investment portfolios (by the current economy) and many other factors have caused them to go into debt. According to an article in "USA Today" seniors are racking up debt like never before. Elderly individuals who are in debt live with a constant burden over their heads. Most of these people are on fixed incomes and have no way of paying off credit cards and home equity loans that continue to mount to cover household budget deficits. In order to meet ongoing payments, seniors often forego purchasing medications and skimp on food budgets. They live like hermits -- never going out and pinching every penny -- in order to pay their obligations.
Most of these people worked hard their entire lives and managed their debt. They never anticipated the rising costs of prescriptions, expensive medical care or depletion of savings by living too long. The good news is there is help for these individuals. Here are just a few examples of some relief options that could be available. There are many more besides these.
Reverse mortgages - A Home Equity Conversion Mortgages (HECMs), also known as a reverse mortgage, is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage". For those seniors who are less fortunate financially but own a home, a reverse mortgage can allow them to remain in the home by creating extra income.
Life settlements -- A life settlement enables older individuals, businesses and other organizations to sell life insurance policies they currently own – but no longer want or need – for an amount greater than the cash surrender value. In some cases the value can be 2-3 times the cash surrender value. Even some term life insurance policies with a conversion option to permanent coverage can qualify for a life settlement.
Government Programs -- Some government programs such as food stamps provide temporary financial help for food. Other programs provide subsidized housing, help with medical expenses and provide tax credits. For veterans there is free health care, inexpensive prescriptions and disability income. Area agencies on aging offer individual counseling, legal help and advice with Medicare costs. (National Care Planning Council)
For some, living on a fixed income and dealing with debt can be an overwhelming burden. There are knowledgeable professionals and debt relief strategies that can assist in easing this burden. The National Care Planning Council keeps a list of financial advisers and attorneys who specialize in this area of planning at www.longtermcarelink.net.
http://www.reversemortgageloans-rates.com
http://www.mireverse.com
Wisconsin Reverse Mortgage
Thursday, May 13, 2010
Thursday, April 29, 2010
The new Reverse Mortgage "Zero, Zero" Program
Your cash available from a reverse mortgage has increased anywhere from $4,500 - $11,000. Some experts are calling this a limited time sale! Call me to find out how much you are entitled to.
Almost 80% of my customers tell me the reverse mortgage sounds too good to be true. The “catch” has always been the closing cost…until now. We have eliminated the monthly service fee and the origination fee. Lets take a look at how much this new program will save you:
Previously the service set aside fee would limit the cash available to you by $2,000 - $5,000 based on your age. NOW that money will be put in your pocketbook! The origination fee charged to you in the past was $2,500 - $6,000 based on the value of your home. NOW that cash is also going to be placed directly in your pocketbook! Even better, the interest rate has been reduced.
If you have ever considered a reverse mortgage, you need to take another serious look and learn how the new savings will benefit you.
Troy Freesemann
Reverse Mortgage USA
(877) 298-5614
http://www.reversemortgageloans-rates.com
Almost 80% of my customers tell me the reverse mortgage sounds too good to be true. The “catch” has always been the closing cost…until now. We have eliminated the monthly service fee and the origination fee. Lets take a look at how much this new program will save you:
Previously the service set aside fee would limit the cash available to you by $2,000 - $5,000 based on your age. NOW that money will be put in your pocketbook! The origination fee charged to you in the past was $2,500 - $6,000 based on the value of your home. NOW that cash is also going to be placed directly in your pocketbook! Even better, the interest rate has been reduced.
If you have ever considered a reverse mortgage, you need to take another serious look and learn how the new savings will benefit you.
Troy Freesemann
Reverse Mortgage USA
(877) 298-5614
http://www.reversemortgageloans-rates.com
Tuesday, March 16, 2010
The Reverse Mortgage Doctor for your Financial Health
The Reverse Mortgage has been around for some time and now most people have heard something about them. We have heard they are the best things for seniors and we have also heard that they are the worst things for seniors. In fact I think that both of the reports are accurate because it depends on each individuals situation.
When we go to a doctor for a yearly check up we aren’t always sick or feeling bad, but just want to make sure that if there is something we are missing that we can catch it early and make adjustments to avoid future problems. We also might learn about new procedures or advances that can eliminate some challenges that we have learned to live with. Of course, if a challenge is more than the doctor is trained for he will send you to a specialist.
We can find a lot of medical information in the news, on the internet and almost everywhere you turn. Even with all of this information we could sort through I don’t believe we would skip our yearly exam and rely on the information we read. With every report contradicting each other and not knowing the source or reliability of the information using it to self diagnose or treat could prove to be very dangerous.
If you agree with that, why would you self diagnose your personal financial situation without sitting down with a “financial doctor”? My area of expertise is reverse mortgages and that’s all I do, because I want to specialize. Maybe you have read all kinds of information about the reverse mortgage and self diagnosed that its not for you. Well you may be right, but what if you are wrong? Wouldn’t the prudent thing to do is visit with a specialist that can give you a full education and understanding? You will either confirm your suspicions that it isn’t for you or find out something that you didn’t know and realize it might just be what you are looking for. Either way you will be better for taking the time.
If a reverse mortgage isn’t for you, I will tell you and if I know of another financial specialist that might help you in your situation, I will refer you to them. I spend most of my day educating people on the misconceptions about the industry and I fear there are a lot of people that could use this product, but are self diagnosing themselves out of the market because of bad reporting and the perpetuation of reverse mortgage misconceptions. Please take the time to talk to an expert…get things in writing and make sure the reverse mortgage specialist answers ALL of your questions in a way that is easy to understand.
Good luck and wishing you physical, mental and financial health
www.reversemortgageloans-rates.com
www.mireverse.com
When we go to a doctor for a yearly check up we aren’t always sick or feeling bad, but just want to make sure that if there is something we are missing that we can catch it early and make adjustments to avoid future problems. We also might learn about new procedures or advances that can eliminate some challenges that we have learned to live with. Of course, if a challenge is more than the doctor is trained for he will send you to a specialist.
We can find a lot of medical information in the news, on the internet and almost everywhere you turn. Even with all of this information we could sort through I don’t believe we would skip our yearly exam and rely on the information we read. With every report contradicting each other and not knowing the source or reliability of the information using it to self diagnose or treat could prove to be very dangerous.
If you agree with that, why would you self diagnose your personal financial situation without sitting down with a “financial doctor”? My area of expertise is reverse mortgages and that’s all I do, because I want to specialize. Maybe you have read all kinds of information about the reverse mortgage and self diagnosed that its not for you. Well you may be right, but what if you are wrong? Wouldn’t the prudent thing to do is visit with a specialist that can give you a full education and understanding? You will either confirm your suspicions that it isn’t for you or find out something that you didn’t know and realize it might just be what you are looking for. Either way you will be better for taking the time.
If a reverse mortgage isn’t for you, I will tell you and if I know of another financial specialist that might help you in your situation, I will refer you to them. I spend most of my day educating people on the misconceptions about the industry and I fear there are a lot of people that could use this product, but are self diagnosing themselves out of the market because of bad reporting and the perpetuation of reverse mortgage misconceptions. Please take the time to talk to an expert…get things in writing and make sure the reverse mortgage specialist answers ALL of your questions in a way that is easy to understand.
Good luck and wishing you physical, mental and financial health
www.reversemortgageloans-rates.com
www.mireverse.com
Tuesday, February 23, 2010
Friday, January 8, 2010
Say Goodbye to Mr. Struggle
You might have heard or noticed on the news that the cost of living is increasing at an alarming rate and our income has stayed pretty steady. Actually with the dollar becoming weaker the purchasing power of our income has steadily decreased.
Take a look at your gas bill and electric bill and compare it to last years bills…its hard to imagine the increase. How are we expected to keep paying these high prices when our income stays the same and our purchasing power keeps decreasing?
There are ways to help get out of this slump, but if you are like many people they live in fear and denial. They are often too depressed and stressed out to look around and see what might be available to help. The economy is not easy for anyone, so it makes you wonder how your neighbor and friends are doing it.
Maybe they were just lucky, they probably have always had luck on their side. Or maybe their family had a lot of money and they were just given money. Or maybe they had a great job and didn’t have any of the financial setbacks in their life you experienced… a lot of different thoughts run through the mind.
But maybe, just maybe the people you see sailing by on easy street might have looked around and found out about a number of programs that were created to help.
I bet before they found the program that helped them they looked at 3 or 4 before deciding which one fit their situation. I am sure they took a hard look at a lot of opportunities, kicked the tires, talked to the experts, did some research. They were smart because after looking at the different programs, when they decided to help themselves they knew without a shadow of a doubt that what they picked was best for them.
I know you are smart too, because you have read this letter to this point and are beginning to think, maybe just maybe there is something out there that would put you back on easy street. Understand, for many people they will struggle all their life and become so comfortable with struggling that struggling becomes their close friend. Mr. or Ms. Struggle have become so close to you that you wouldn’t dare look at a program that would alienate one of your closest and dearest friends that has been with you for years. I mean they have been with you all your life.
Now lets tell Mr. or Ms. Struggle that you would like to start seeing other people and maybe you will find Mr. or Ms. Prosperity and Mr. or Ms. Financial Freedom more fun to hang around with. You see as soon as you meet Mr. or Ms. Cash Flow, you will soon forget about Mr. or Ms. Struggle.
Let me introduce you to your new friends – I promise a long fulfilling relationship with a friend that will cause you to quickly forget about Mr. or Ms. Struggle.
(866) 800-0280
http://www.mireverse.com/
www.reversemortgageloans-rates.com
Take a look at your gas bill and electric bill and compare it to last years bills…its hard to imagine the increase. How are we expected to keep paying these high prices when our income stays the same and our purchasing power keeps decreasing?
There are ways to help get out of this slump, but if you are like many people they live in fear and denial. They are often too depressed and stressed out to look around and see what might be available to help. The economy is not easy for anyone, so it makes you wonder how your neighbor and friends are doing it.
Maybe they were just lucky, they probably have always had luck on their side. Or maybe their family had a lot of money and they were just given money. Or maybe they had a great job and didn’t have any of the financial setbacks in their life you experienced… a lot of different thoughts run through the mind.
But maybe, just maybe the people you see sailing by on easy street might have looked around and found out about a number of programs that were created to help.
I bet before they found the program that helped them they looked at 3 or 4 before deciding which one fit their situation. I am sure they took a hard look at a lot of opportunities, kicked the tires, talked to the experts, did some research. They were smart because after looking at the different programs, when they decided to help themselves they knew without a shadow of a doubt that what they picked was best for them.
I know you are smart too, because you have read this letter to this point and are beginning to think, maybe just maybe there is something out there that would put you back on easy street. Understand, for many people they will struggle all their life and become so comfortable with struggling that struggling becomes their close friend. Mr. or Ms. Struggle have become so close to you that you wouldn’t dare look at a program that would alienate one of your closest and dearest friends that has been with you for years. I mean they have been with you all your life.
Now lets tell Mr. or Ms. Struggle that you would like to start seeing other people and maybe you will find Mr. or Ms. Prosperity and Mr. or Ms. Financial Freedom more fun to hang around with. You see as soon as you meet Mr. or Ms. Cash Flow, you will soon forget about Mr. or Ms. Struggle.
Let me introduce you to your new friends – I promise a long fulfilling relationship with a friend that will cause you to quickly forget about Mr. or Ms. Struggle.
(866) 800-0280
http://www.mireverse.com/
www.reversemortgageloans-rates.com
Just Scraping By
If I had a nickel for everyone that told me that they aren’t interested in a Reverse Mortgage because they are “doing fine” or “just scraping by” I would be on a beach somewhere enjoying a cool drink!
Whenever I hear those three words, I take a moment and try to imagine what my retirement will look like. Will I be happy in my retirement years – just scraping by? Is that really why I am working so hard to raise my money and hopefully put a little away so in my retirement I can just “scrape by”?
What happened to the “Golden Years”? What happen to enjoying retirement? What happened to all that money that I worked so hard for over the last 40 years? I paid off my house, raised my family and they had nice things now I finally have the time to do all the things I put off so I could take care of my family…but I can’t because I am “just scraping by”.
What a sad state of affairs – is this what our seniors have come to expect – scrape by all your life taking care of your family and then retire! Oh and continue to “just scrape by”.
I actually heard that the money one mother gets from her Birthday, Mothers Day and Christmas takes care of her – either she gets a lot in those cards or she can get by on barely anything (I want her Christmas list). She is just scraping by!
What I offer isn’t for everyone, but it is a tool to help people enjoy their retirement. It is an option to allow you to enjoy your “Golden Years”. But we all know that ignorance is bliss – but not exploring your options and “just scraping by” doesn’t sound to blissful.
Well the information is free, the education costs nothing – but ignorance can be very costly.
Oh and if you enjoy the “challenge” of “just scraping by” – then it would be a waste of time to get together – but if you want more out of life than to “just scrape by”, maybe it might be worthwhile to talk!
Troy Freesemann
(866)800-0280
http://www.reversemortgageloans-rates.com/
http://www.mireverse.com/
Whenever I hear those three words, I take a moment and try to imagine what my retirement will look like. Will I be happy in my retirement years – just scraping by? Is that really why I am working so hard to raise my money and hopefully put a little away so in my retirement I can just “scrape by”?
What happened to the “Golden Years”? What happen to enjoying retirement? What happened to all that money that I worked so hard for over the last 40 years? I paid off my house, raised my family and they had nice things now I finally have the time to do all the things I put off so I could take care of my family…but I can’t because I am “just scraping by”.
What a sad state of affairs – is this what our seniors have come to expect – scrape by all your life taking care of your family and then retire! Oh and continue to “just scrape by”.
I actually heard that the money one mother gets from her Birthday, Mothers Day and Christmas takes care of her – either she gets a lot in those cards or she can get by on barely anything (I want her Christmas list). She is just scraping by!
What I offer isn’t for everyone, but it is a tool to help people enjoy their retirement. It is an option to allow you to enjoy your “Golden Years”. But we all know that ignorance is bliss – but not exploring your options and “just scraping by” doesn’t sound to blissful.
Well the information is free, the education costs nothing – but ignorance can be very costly.
Oh and if you enjoy the “challenge” of “just scraping by” – then it would be a waste of time to get together – but if you want more out of life than to “just scrape by”, maybe it might be worthwhile to talk!
Troy Freesemann
(866)800-0280
http://www.reversemortgageloans-rates.com/
http://www.mireverse.com/
Tuesday, December 8, 2009
Reverse Mortgage Loans
For many seniors the equity in their home is their largest single asset, yet it is unavailable to use unless they use a conventional home-equity loan. But a conventional loan really doesn't free up the equity because the money has to be paid back with interest.
A reverse mortgage is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage".
Many seniors are finding they can use a reverse mortgage to pay off an existing conventional mortgage, to create money for a down payment for a second home or to pay off debt. Popularity is skyrocketing. Over the last five years the number of reverse mortgages nationwide has tripled. The uses of this untapped wealth are only limited by a person's imagination.
For those seniors who earn low incomes but own a home, a reverse mortgage can allow them to remain in the home by creating extra income. It can also allow for remodeling or repairs and when the time comes to sell, the investment in the home can make it more valuable.
False Beliefs about Reverse Mortgages:
“The lender could take my house.” The homeowner retains full ownership. The Reverse Mortgage is just like any other mortgage; you own the title and the bank holds a lien. You can pay it off anytime you like.
“I can be thrown out of my own home.” Homeowners can stay in the home as long as they live, with no payment requirement.
“I could end up owing more than my house is worth.” The homeowner can never owe more than the value of the home at the time the loan is due.
“My heirs will be against it.” Experience demonstrates heirs are in favor of Reverse Mortgages.
Virtually anyone can qualify. You must be at least 62, own and live in, as a primary residence, a home [1-4 family residence, condominium, co-op, permanent mobile home, or manufactured home] in order to qualify for a reverse mortgage.
There are no income, asset or credit requirements. It is the easiest loan to qualify for.
A reverse mortgage is similar to a conventional mortgage. As an example:
•The bank does not own the home but owns a lien on the property just as with any other mortgage.
•You continue to hold title to the property as with any other mortgage
•The bank has no recourse to demand payment from any family member if there is not enough equity to cover paying off the loan
•There is no penalty to pay off the mortgage early
•When the loan becomes due, you can refinance and keep the house.
The proceeds from a reverse mortgage are tax-free and can be used for any legal purpose you wish:
•daily living expenses
•home repairs and improvements
•medical bills and prescription drugs
•pay-off of existing debts
•education, travel
•long-term care and/or long-term care insurance
•financial and estate tax plans
•gifts and trusts
•to purchase life insurance
•or any other needs you may have.
The amount of reverse mortgage benefit for which you may qualify, will depend on
1.your age at the time you apply for the loan,
2.the reverse mortgage program you choose,
3.the value of your home, current interest rates,
4.and for some products, where you live.
As a general rule, the older you are and the greater your equity, the larger the reverse mortgage benefit will be (up to certain limits, in some cases). The reverse mortgage must pay off any outstanding liens against your property before you can withdraw additional funds.
The loan is not due and payable until the borrower no longer occupies the home as a principal residence (i.e. the borrower sells, moves out permanently or passes away). At that time, the balance of borrowed funds is due and payable, all additional equity in the property belongs to the owners or their beneficiaries. If the heirs want to keep the home with the additional equity, they can refinance with a conventional loan.
There are three reverse mortgage loan products available, the FHA - HECM (Home Equity Conversion Mortgage), Fannie Mae - HomeKeeper®, and the Cash Account programs. Over 90% of all reverse mortgages are HECM contracts.
The costs associated with getting a reverse mortgage are similar to those with a conventional mortgage, such as the origination fee, appraisal and inspection fees, title policy, mortgage insurance and other normal closing costs. With a reverse mortgage, all of these costs will be financed as part of the mortgage prior to your withdrawal of additional funds.
You must participate in an independent Credit Counseling session with an FHA-approved counselor early in the application process for a reverse mortgage. The counselor's job is to educate you about all of your mortgage options. This counseling session is at no cost to the borrower and can be done in person or, more typically, over the telephone. After completing this counseling, you will receive a Counseling Certificate in the mail which must be included as part of the reverse mortgage application.
You can choose 3 options to receive the money from a reverse mortgage:
1) all at once (lump sum);
2) fixed monthly payments (for up to life);
3) a line of credit; or a combination of a line of credit and monthly payments.
The most popular option, chosen by more than 60 percent of borrowers, is the line of credit, which allows you to draw on the loan proceeds at any time. The line of credit also earns interest which in essence is allowing the equity in the home to grow. For example $120,000 in a line of credit earning 5% would be worth almost $200,000 10 years from now.
Keeping money in a reverse mortgage line of credit in most states will not count as an asset for Medicaid eligibility as this would be considered a loan and not a resource for Medicaid spend down. In other words, keeping the money in the line of credit will not disqualify you from becoming Medicaid eligible.
However, transferring the money to an investment or to a bank account would represent an asset and would trigger a spend down requirement and delay eligibility. Please note however that distinguishing between what portion of reverse mortgage proceeds might be counted as a loan and what portion as an asset is not a simple black and white decision. It is best to get an opinion from an elder attorney in your state.
If a senior homeowner chooses to repay any portion of the interest accruing against his borrowed funds, the payment of this interest may be deductible (just as any mortgage interest may be). A reverse mortgage loan will be available to a senior homeowner to draw upon for as long as that person lives in the home. And, in some cases, the lender increases the total amount of the line of credit over time (unlike a traditional Home Equity Line where the credit limit is established at origination). If a senior homeowner stays in the property until he or she dies, his or her estate valuation will be reduced by the amount of the debt.
At the death of the last borrower or the sale of the home, the loan is repaid from equity in the home. Any remaining equity (which is often the case) goes to the heirs.
Almost all reverse mortgages are the HECM loan which is guaranteed by FHA mortgage insurance. If there is not enough equity to cover the loan, the insurance satisfies the loan by paying the deficit. With a HECM loan, the bank will never come after the heirs to satisfy the mortgage obligation.
www.mireverse.com
www.reversemortgageloans-rates.com
A reverse mortgage is a risk-free way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage".
Many seniors are finding they can use a reverse mortgage to pay off an existing conventional mortgage, to create money for a down payment for a second home or to pay off debt. Popularity is skyrocketing. Over the last five years the number of reverse mortgages nationwide has tripled. The uses of this untapped wealth are only limited by a person's imagination.
For those seniors who earn low incomes but own a home, a reverse mortgage can allow them to remain in the home by creating extra income. It can also allow for remodeling or repairs and when the time comes to sell, the investment in the home can make it more valuable.
False Beliefs about Reverse Mortgages:
“The lender could take my house.” The homeowner retains full ownership. The Reverse Mortgage is just like any other mortgage; you own the title and the bank holds a lien. You can pay it off anytime you like.
“I can be thrown out of my own home.” Homeowners can stay in the home as long as they live, with no payment requirement.
“I could end up owing more than my house is worth.” The homeowner can never owe more than the value of the home at the time the loan is due.
“My heirs will be against it.” Experience demonstrates heirs are in favor of Reverse Mortgages.
Virtually anyone can qualify. You must be at least 62, own and live in, as a primary residence, a home [1-4 family residence, condominium, co-op, permanent mobile home, or manufactured home] in order to qualify for a reverse mortgage.
There are no income, asset or credit requirements. It is the easiest loan to qualify for.
A reverse mortgage is similar to a conventional mortgage. As an example:
•The bank does not own the home but owns a lien on the property just as with any other mortgage.
•You continue to hold title to the property as with any other mortgage
•The bank has no recourse to demand payment from any family member if there is not enough equity to cover paying off the loan
•There is no penalty to pay off the mortgage early
•When the loan becomes due, you can refinance and keep the house.
The proceeds from a reverse mortgage are tax-free and can be used for any legal purpose you wish:
•daily living expenses
•home repairs and improvements
•medical bills and prescription drugs
•pay-off of existing debts
•education, travel
•long-term care and/or long-term care insurance
•financial and estate tax plans
•gifts and trusts
•to purchase life insurance
•or any other needs you may have.
The amount of reverse mortgage benefit for which you may qualify, will depend on
1.your age at the time you apply for the loan,
2.the reverse mortgage program you choose,
3.the value of your home, current interest rates,
4.and for some products, where you live.
As a general rule, the older you are and the greater your equity, the larger the reverse mortgage benefit will be (up to certain limits, in some cases). The reverse mortgage must pay off any outstanding liens against your property before you can withdraw additional funds.
The loan is not due and payable until the borrower no longer occupies the home as a principal residence (i.e. the borrower sells, moves out permanently or passes away). At that time, the balance of borrowed funds is due and payable, all additional equity in the property belongs to the owners or their beneficiaries. If the heirs want to keep the home with the additional equity, they can refinance with a conventional loan.
There are three reverse mortgage loan products available, the FHA - HECM (Home Equity Conversion Mortgage), Fannie Mae - HomeKeeper®, and the Cash Account programs. Over 90% of all reverse mortgages are HECM contracts.
The costs associated with getting a reverse mortgage are similar to those with a conventional mortgage, such as the origination fee, appraisal and inspection fees, title policy, mortgage insurance and other normal closing costs. With a reverse mortgage, all of these costs will be financed as part of the mortgage prior to your withdrawal of additional funds.
You must participate in an independent Credit Counseling session with an FHA-approved counselor early in the application process for a reverse mortgage. The counselor's job is to educate you about all of your mortgage options. This counseling session is at no cost to the borrower and can be done in person or, more typically, over the telephone. After completing this counseling, you will receive a Counseling Certificate in the mail which must be included as part of the reverse mortgage application.
You can choose 3 options to receive the money from a reverse mortgage:
1) all at once (lump sum);
2) fixed monthly payments (for up to life);
3) a line of credit; or a combination of a line of credit and monthly payments.
The most popular option, chosen by more than 60 percent of borrowers, is the line of credit, which allows you to draw on the loan proceeds at any time. The line of credit also earns interest which in essence is allowing the equity in the home to grow. For example $120,000 in a line of credit earning 5% would be worth almost $200,000 10 years from now.
Keeping money in a reverse mortgage line of credit in most states will not count as an asset for Medicaid eligibility as this would be considered a loan and not a resource for Medicaid spend down. In other words, keeping the money in the line of credit will not disqualify you from becoming Medicaid eligible.
However, transferring the money to an investment or to a bank account would represent an asset and would trigger a spend down requirement and delay eligibility. Please note however that distinguishing between what portion of reverse mortgage proceeds might be counted as a loan and what portion as an asset is not a simple black and white decision. It is best to get an opinion from an elder attorney in your state.
If a senior homeowner chooses to repay any portion of the interest accruing against his borrowed funds, the payment of this interest may be deductible (just as any mortgage interest may be). A reverse mortgage loan will be available to a senior homeowner to draw upon for as long as that person lives in the home. And, in some cases, the lender increases the total amount of the line of credit over time (unlike a traditional Home Equity Line where the credit limit is established at origination). If a senior homeowner stays in the property until he or she dies, his or her estate valuation will be reduced by the amount of the debt.
At the death of the last borrower or the sale of the home, the loan is repaid from equity in the home. Any remaining equity (which is often the case) goes to the heirs.
Almost all reverse mortgages are the HECM loan which is guaranteed by FHA mortgage insurance. If there is not enough equity to cover the loan, the insurance satisfies the loan by paying the deficit. With a HECM loan, the bank will never come after the heirs to satisfy the mortgage obligation.
www.mireverse.com
www.reversemortgageloans-rates.com
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