Reverse Mortgage Loans

If you were to ask the average consumer to define thereverse mortgage concept, you would find very few able to do so. Many consumers, especially those who aren'tup on their mortgage products and their availability will never have heard of areverse mortgage, much less able to explain the concept. But it may just be one of the best financialplanning tools available to many seniors and those reaching retirementage. 

As many individuals reach retirement age, their fixed incomes simply aren'tadequate. They aren't receiving enoughthrough social security or a pension fund to take care of the rising costs ofliving and the medical attention many older citizens must have. So what is the solution? Many of these retirement age citizens havechildren. Why can't their childrensupplement their incomes, or simply take care of their elder care needs? The simple fact is that many of theirchildren aren't in a position to care for their elderly parents. Their incomes aren't enough to have moneyleft over, and if both spouses work, there is no one to take care of an agingparent. 

It is at this juncture that many people have begun to turn to the reverse mortgage inseeking the increase in monthly income that is so desperately needed. The reverse mortgage offers older citizens away to benefit from the equity in their home, because the reverse mortgageturns that equity into a monthly income. Quite frankly, unless you live with your parents, or you intend to moveinto your parents home when your parents pass, you aren't going to retain thehome; statistics attest to the fact that the vast majority of children selltheir parents home, once their parents are no longer in need. Why not cash in on that equity when yourparents are alive, and need the monthly income? 

The popularity of the reverse mortgage has been steadily increasing, and many reverse mortgagecompanies expect 2005 to be a banner year. As the idea begins to catch, and spread among the elderly, there aremore mortgage companies that offer a reverse mortgage product. The key here is that most of these elderlydid plan for retirement; they did try to make the necessary adjustments so thatthere monthly incomes would be enough to see them through their retirementyears. Thanks, however, to the risingcost of medical care, prescription medicine, and heating fuel, many oldercitizens have found that their planned retirement income each month is simplynot enough.

There are those reaching the retirement years, for which the reverse mortgage is not anoption, simply because they have no equity in their homes, or they don't own ahome; but for the remaining seniors,it's an option that I would exercise, especially if I were certain my homewould be sold during an estate or inheritance sale. The money that the reverse mortgagegenerates, can add so much to the few years we have during our retirement inthe areas of travel, entertainment, and sheer enjoyment of life. 

Since we can never be sure that we've properly prepared for retirement, or that someunexpected emergency won't knock us off our feet, or that we simply do not haveenough thanks to the stock market losses of recent years, the reverse mortgageis one of the best ways for older citizens to access the equity in their homesand turn it into ready cash.

We have saved the best part, however for last: any proceeds from the reverse mortgageare tax-exempt proceeds. In other words,you will not have to pay tax on the money. There are other, tax-exempt options, but the reverse mortgage remainsone of the most conducive to the senior citizens needs, as well as those oftheir families. The interest payments ona reverse mortgage are deferred until death, therefore, seniors do not have tobe concerned with making interest payments or tax payments on theproceeds. 

If you're not familiar with the reverse mortgage, and you think you might benefit, orthat your parents might benefit, take a moment to seek the advice of afinancial officer, and then quite possibly your attorney. Never make any decision before you fullyunderstand what the consequences of your decision might be, legal or otherwise.