Is a Reverse Mortgage Right for You?
Unfortunately, many elderly Americans are living off of a shoe string budget. Social Security payments
do not cover the cost of living for most seniors. People once depended on employer funded pension and
retirement plans to pay for their retirement, but those days are all but gone. Add to these issues the fact
that people are living longer and the cost of medical care continues to rise and it is not surprising that
many of America’s elderly are struggling financially. If you are one of them, you may have considered a
reverse mortgage. Make sure you know exactly what a reverse mortgage is and what the advantages
and disadvantages are before deciding is one is right for you.
A reverse mortgage allows a homeowner to take advantage of the equity built up in the home. A reverse
mortgage differs from an equity line in that the homeowner does not have to pay back the reverse
mortgage until he or she no longer lives in the home. With an equity line of credit, the money borrowed
must be repaid as soon as it is used whereas in a reverse mortgage there are no monthly payments due.
You may receive your funds in a number of ways. You can elect monthly payments, a line of credit to be
used as you need it, or a combination of two. The amount you can borrow will depend on a number of
factors including your age, the value of your home, and what you currently owe on the home, if
There may be fees involved in a reverse mortgage that you should be aware of. In addition, remember
that the amount owed will have to be paid back when you no longer live in the home or when you die.
This will directly impact your estate planning because it will decrease the total value of your estate. A
reverse mortgage, however, may be the answer for an elderly individual or couple who has paid off a
home, or has a very low mortgage balance, and is struggling to pay the bills each month. It can also be a
lifeline for a senior who has healthcare expenses that insurance does not cover in full. Be sure to talk to
your estate planning attorney about the impact that a reverse mortgage will have on your estate plan.
Experienced estate planning attorneys Roseville CA of the John Rogers Burk, A Law Corporation offers
estate planning and business planning resources to residents of Roseville CA. To learn more about these
free resources, please visit www.roseville-estate-planning.com/ today.