How Reverse Mortgages help Aging Seniors

How

Reverse Mortgages

help

Aging Seniors

By Jessica Bennet

© http://www.mortgagefit.com/

Aging Seniors are anxious about …

Steady Flow of Income

Why ?Sustain Rising healthcare costs

Maintain lifestyle

Retain Homeownership


What Seniors usually choose …

Social Security Income – Federal benefit for 62 year old and above

Retirement Plans 401k and 403b –Distribution after 59 and ½ years without penalty; must withdraw at 70 and 1/2 years

Medicare – Federal Health Insurance for aged 65 and above

Medicaid – Need-based Healthcare Program for low income seniors

HMO – Health Insurance program

Home Equity loans – A way to pull out equity


Comparatively,

Reverse Mortgageis a better option than others


Why Reverse Mortgage?Options for Seniors :

Social Security Income

Limitations How Reverse Mortgage is better

1. Not at par with inflation

2. Taxes to be paid by high income seniors

1. Credit line option helps to earn interest on unused funds and fight inflation

2. No taxes to be paid



Retirement plans 401k and 403b


1. Income taxes to be paid at the time of distribution

1. Loan funds are not taxable



Medicare


1. Qualifying age is 65

2. Only Short term care

1. Qualifying age is 62

2. Provides funds as long as you are alive

3. Pay a form of medical cost to receive service

3. Need not pay any loan costs; often included into the loan.

4. Excludes coverage for certain healthcare, in-home care and home repairs

4. No coverage restrictions



Medicaid Limitations How Reverse Mortgage is better

1. Not available to those having home equity more thandefined Federal Limit

2. Pay a form of medical cost to receive service

1. No defined Federal Limit

2. Need not pay any loan costs; often included into the loan

3. Does not cover all healthcare costs 3. No coverage restrictions



HMO


1. Not all medical treatment are covered

2. Need to pay fixed amount as monthly fee

1. Can be used for wider coverage based upon home equity and loan amount

2. No monthly payment



Home equity loan


1. Need to make high monthly payment

2. Fulfill income and credit criteria

1. No monthly payment

2. No income and credit criteria


Other benefits …

Reduces Estate Tax At the homeowner’s death, the mortgage debt reduces the home value while evaluating estate tax.

Provides financial security to heirs –It helps you to purchase and maintain a life insurance policy for your heirs to pay estate tax.

Tax Deduction Benefits – Avail tax deduction on accrued interest but only when the loan is paid back (subject to limitations).


If Reverse mortgage is my choice, what about other benefits?

You are quite eligible for: Social Security Income Medicare Medicaid Ineligible if total cash flow in a month exceed Medicaid Income Limit


What initiatives are being taken by the Federal Government?

1. Insures Reverse Mortgages (FHA approved lenders provide HECM)

2. Makes Counseling Mandatory (HUD approved counselor offers counseling services)

3. Ensures Consumer protection


Want to know more?Visit our Reverse Mortgage Section

… Any Problem?Ask our Reverse Mortgage Expert

Tony Golden

Reverse Mortgage Specialist

in MortgageFit Community Forum


http://www.mortgagefit.com/reverse.html

http://www.mortgagefit.com/tgolden/

http://www.mortgagefit.com/ask/

http://www.mortgagefit.com/ask/

http://www.mortgagefit.com/tgolden/

How Reverse Mortgages help Aging Seniors

Economy & Finance

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