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Question: Where can I get more detailed information about reverse mortgages for seniors? We have a house in a "plus 55" community in California for which we paid $315,000 four years ago. We are told now that it, along with all the other houses in the area, would sell for about 20% less than what we paid. Would a reverse mortgage work for us? We are 71 and 64 respectively.
Answer: You have not provided me with nearly enough information with which I need to give you a proper answer.
First some questions:
Do you have any liens on the property at this time?
How much longer would you plan to stay in this home if you do a reverse mortgage?
Which one of you is 71?
What is the ZIP code for the property?
Is it a single family residence, condominium or a townhouse?
What are your priorities, both long- and short-term?
Do you plan to leave something to your heirs? To charity?
Do you have long-term-care insurance?
I do not worry at all about those who plan to live in the home until they pass away, that is exactly what this product is designed to support. What I worry about are those who take out a reverse mortgage, live in their home for maybe three years, then have a stroke or suffer some other disabling illness or injury and need to get moved immediately into an assisted living facility. Especially if they are single.
In those instances -- actually, if you are out of the house for more than 12 consecutive months -- the property will need to be sold to repay the mortgage. And that leads to more questions: What funds will you have available to get you into the facility? Who will take care of the sale of the home? Do you have long-term-care insurance or a plan to move into a Medicare/Medicaid facility should something happen to you?"
When properly applied a reverse mortgage can serve to preserve, protect and, quite possibly, enhance a senior's estate. Although reverse mortgages are not the right answer for all senior homeowners, they are a promising financial tool that all senior homeowners should look into, just as they would any other financial tool available to them.
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