My brother and his wife have entered into a situation that nobody would want to be in, they have a neighbor who
has fallen very ill and
they are the only ones who are there to "
take care of him". This is not something that they
have to do but more like something
that they feel compelled to do, the elderly neighbor is old and is totally alone. At this point, he is unable to fully take care of himself and Medicare has made it clear that they will absorb and drain any money that he has in his name.
Its a sad fact to watch a man who served our country more than once, not get the proper care because he has "too much". Yes, he has "too much" but not enough to get him around the clock care.
Questions were raised and could only be answered by an Elder Care Attorney. This attorney advised the elderly man to take a reverse mortgage to help pay for his care. There is not enough cash in the bank to last more than two short months and there will be funds that need to be spent to ensure proper care.
So after I looked up some information about Reverse Mortgage, I can totally see how an elderly couple could fall into the pitfalls of the product. But, what other options do most elderly have. They have worked all their lives and they have become house rich but cash poor.
What is a Reverse Mortgage?
In short, a reverse mortgage is taking the value of your home and turning it into cash. The cash you get from a reverse mortgage can be paid to you in several ways:
- one lump sum
- as a regular monthly cash advance;
- as a "credit line" account that lets you decide when and how much of your available cash is paid to you; or
- as a combination of these payment methods.
Now the creative part of this whole product is the repayments. No matter which way you chose to have this loan paid to you, you don't have to pay anything back until you die, sell your home or actually just move out of the home, permanently. Keep in mind - the only way you would be eligible for most reverse mortgages is you must own your home and be 62 years of age or older.
Any Thoughts?
;)
;)
Christine, it is expensive to get a Reverse Mortgage, however the alternatives are few for the elderly. If someone is truly wanting to stay in their home and be independent or the family feels that the move will put too much strain on their health, then it is a great option. And if they out live the projected stats then the lender loses. I just wish we could come up with a plan that allowed for an insurance policy that could be tied to the transaction and help restore the equity position, but I don't see that happening. I think we need better information sources and education on the topic.