A recent article by Paula Chin in Family Circle noted
“Your parents have spent years faithfully making monthly mortgage payments. Maybe it’s time to let that hard-earned equity give them cash in their bank account.”
When Terry Savage’s 80-year-old father retired in 2002, he wanted to stay in his Florida condominium. But while the mortgage was almost paid off, he had plenty of other bills and very little in savings. So Savage, a nationally syndicated financial columnist, and her brothers helped him take out a reverse mortgage, allowing him to convert his home equity into tax-free cash to live on. “That gave him a sense of pride and independence,” says Savage. “He lived there happily for 16 more years. After he died, the loan came due, and my brothers and I turned the condo over to the bank and that was that. There are situations when a reverse mortgage is a blessing, and this was one.”
Reverse mortgages can be a financial boost for seniors who need to supplement their income, whether for health care expenses, home improvements or the peace of mind of knowing there’s money for a rainy day. However, they’re not right for everyone. If your parents are considering a reverse mortgage, everyone needs to know the facts before signing on the dotted line.
For more on how it works, the downside and how to take the first steps, continue reading here.