For many senior homeowners, a reverse mortgage may be a good way to gain income later in life. Designed for people age 62 and older, reverse mortgages allow older adults to use their home equity to receive a lump sum, monthly payments and/or a line of credit. Reverse mortgages are popular options for seniors who need help meeting monthly expenses or paying for long-term health care in Centennial.
How a Reverse Mortgage Works
Unlike a traditional home equity loan, a reverse mortgage doesn’t have to be repaid until you pass away, move or sell your home. You can use some or all of your home equity for income, and you can continue to live in your home without making any payments on the loan. You’re obligated to pay for necessary home repairs, however, and you must pay off any other mortgage you may have.
If you elect to receive monthly payments, the money is not taxable as long as you spend it each month, and it won’t affect your Medicare or Social Security benefits either. Since you retain title and ownership of your home, you are still responsible for property taxes and home insurance.
Most reverse mortgages feature adjustable interest rates. Your heirs can repay the loan and interest if they wish to keep your home. Otherwise, the lender sells the property, and if the sale price is greater than the loan balance, the money goes to your heirs.
Is a Reverse Mortgage Right for You?
If you are age 62 or older and have equity in your home, a reverse mortgage can provide you with the money you need to enhance your quality of life. The extra income can allow you to make repairs and improvements to your home or can pay for long-term care insurance and in-home medical care.
If you are thinking about using a reverse mortgage to pay for care for yourself or for an aging parent or loved one, we recommend that you consult with your Financial Advisor to evaluate your options. To learn more about care options available, reach out to Home Care Assistance of Centennial today. We are a leading provider of in-home senior care, offering flexible hourly and live-in care plans, highly trained and compassionate caregivers and comprehensive care services. Call 303-957-3100 to speak with a Care Manager and schedule a complimentary, no-obligation consultation.