Mom or Dad get older and retirement income doesn't meet their basic needs. You may not have
the cash flow to send them money every month. They may be silent about the struggle to cut coupons and make ends meet.
the cash flow to send them money every month. They may be silent about the struggle to cut coupons and make ends meet.
He or She or both have equity or cash value in their home.
They want to stay in the home until the die.
Neighborhood friends, church and stores are familiar. There's a boy down the street who walks the aging dog. The family next door greets and waves each time the parents come or go. It's easy to know where you are going and walk the sidewalks. Familiarity over time makes a place become a home.
Change is difficult for the elderly. Packing mementos, giving away belongings and down sizing to smaller home does not always bring happiness. Living in assisted care facility seems safer to children who live far away because there are professionals to check on Mom or Dad. You sell your parent(s) on bridge, golf, and activities but the loss of privacy, loss of history and lack of freedom is hard for them to accept. For me not being able to garden would make me depressed.
A reverse mortgage allows Mom or Dad or both to stay in their home. Increase monthly cash flow pays for prescriptions, food, travel and little luxuries they couldn't previously afford.
A reverse is a government loan also called a HECM - organized like a backwards Home Equity Line.
The home ownership obligations with a HECM are property taxes, fire insurance (or flood if in mapped area) and Homeowner Association fees due (if any). The borrowers keep the property in their own names. they can live there until they pass away. Remaining equity, is then distributed upon refinance or sale of the home.