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Someone over the age of 65 needs long-term care almost 7 out of 10 in the future, according to the Ministry of Public Health and Social Services, and many have no savings to cope with the cost of help.
But they can have a house without debt and their honesty, which gives them the possibility of a reverse mortgage to cover maintenance costs.
Here’s how you can evaluate whether a reverse mortgage can be a good choice.
WHAT IS A RETURN MORTGAGE?
A reverse mortgage is a loan or credit line for the estimated value of your home. Most reverse mortgages are covered by federal Home Equity Conversion Mortgages (HECM), which are loans up to the federal limit of $ 970,800. Homeowners must be over 62 years of age to apply.
If you have at least 50% to 55% of the equity in your home, there is a good chance that you will be entitled to a loan or credit line for part of this equity. How much you have access to depends on your age and the estimated value of the house.
You will continue to have to pay taxes and home insurance and the loan will be repaid if the lender dies or moves. If there are two creditors, the credit line will remain in place until the other creditor dies or moves.
A reverse mortgage is a non-recourse loan, which means that if the amount of the loan exceeds the value of the house, the lender or heir does not have to pay more than the loan amount or what the house can sell.
Can You Use A Reverse Mortgage FOR LONG PRAYERS?
A reverse mortgage can provide a significant source of income for paying for long-term care, but there are some limitations.
For example, a reverse mortgage requires you to live in a house. If you are the only one borrowing a reverse mortgage and you have to move to a medical facility for a year or more, you may be in breach of your loan requirements and have to repay the loan.
Due to the price, reverse mortgages are best suited for a situation where you plan to stay in your house for a long time.
They don’t make sense if your home isn’t suitable for an aging area or if you plan to move within the next three to five years, says Marguerita Cheng, a certified financial planner in Potomac, Maryland.
But when it comes to home health care or payment for a second lender who is in a nursing home, housekeeping can help bridge the gap.
If you want to pay when you go and not take money from low market securities, you can get it from your home capital, says Dennis Nolte, CFP of Winter Park, Florida.
Reference Source: Johnson City Press
