If you're an aging homeowner planning to stay, a reverse mortgage may be a sensible way to help finance your golden years. This is especially true for older people whose spouses are also over 62 years old and may be listed as co-borrowers of the loan. As Everson mentioned, only older people can legally access reverse mortgages. That's why you'll only see them advertised for older people.
And depending on an older person's situation, it might be a good option for them. In general, reverse mortgage income does not affect an older person's eligibility for Social Security or Medicare and can be used as the older person wishes. This reverse mortgage is insured by the United States Federal Government and can only be accessed through a lender approved by the Federal Housing Administration (FHA). They are charged an interest rate but, unlike traditional term mortgages, a monthly payment is not required.
There are several types of reverse mortgages, but only one is relevant for seniors who want to pay for senior care or home modifications: the conversion mortgage with equity (HECM) mortgage, formerly known as HECM Saver. The HECM standard has higher upfront costs, but it allows people to borrow a higher percentage of their home's value on the mortgage. However, if the proceeds from a reverse mortgage can be used to pay for home care that allows older people to continue to live comfortably at home, a reverse mortgage is still an option. What follows is an exploration of different scenarios and why different families might choose for or against the use of a reverse mortgage.
Single seniors with Fair HealthReverse mortgages are a good option, as the older person does not require immediate attention. Single seniors who need care If the family can provide enough care so that the person can continue to live in their home or if the proceeds from a reverse mortgage can pay for in-home care or adult day care, then a reverse mortgage is a viable option. This type of mortgage will not affect any Old Age Insurance or Guaranteed Income Supplement benefits you may receive, so they are considered “suitable for seniors.” Now consider whether you have taken out a reverse mortgage on the home and that money was used to pay a family member for care. The website includes information on alternatives to reverse mortgages, as well as things to consider before getting a reverse mortgage.
This is because the rules governing reverse mortgages require a home to be sold if the owner lives outside the home for 12 consecutive months. Other types of reverse mortgages are single-purpose mortgages (sometimes offered by state or local governments) and wholly-owned reverse mortgages. Throughout her mortgage career, Jennifer has helped hundreds of clients solve their financial challenges. Elderly people married to a spouse who needs care A common reason why older people apply for reverse mortgages is when one of the spouses of a married couple requires care.