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Reverse Mortgages
Old 06-19-2016, 10:27 AM   #1
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Reverse Mortgages

Anyone have any experience with these products? I ask due to relative, 92, house worth over 1 mil no debt 150k cash paying for spouse assisted living $6500/mo hi due to special issues, dementia, wanderer...age 90


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Old 06-19-2016, 02:50 PM   #2
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No personal experience as I'm not old enough to qualify, but I've researched them enough to know the fees are very high. If you need one, definitely shop around and negotiate all of the fees as much as possible. Get a few quotes before making any decisions.

A reverse mortgage is part of my back up plan if I run out of money before I run out of time, but it's my last resort option.
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Old 06-19-2016, 07:57 PM   #3
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Like was said above, it's a last resort.
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Old 06-19-2016, 08:08 PM   #4
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I don't know anything about reverse mortgages. Wouldn't someone in their 90's be better off selling outright, investing the proceeds and renting an apartment/condo?
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Old 06-19-2016, 08:35 PM   #5
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I don't know anything about reverse mortgages. Wouldn't someone in their 90's be better off selling outright, investing the proceeds and renting an apartment/condo?

Financially this may be so, but not all 90 year olds would be capable of pulling all of that off easily. At that age I would think I'd want to stay in the home I've been living in for many years if at all possible. Moving at any age is unpleasant, but at 90 is't just impractical.


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Old 06-19-2016, 08:52 PM   #6
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Tell your relative to start working with social services,if his spouse spends down the 125K in a nursing which would last around 2 years, he doesn't have to sell his home, he will get to keep his home and some money to live on. Social services might put a lien on his home that would be payed after he dies or no longer lives in that house. Look into this first...
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Old 06-20-2016, 04:14 AM   #7
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depends how title to the house is held . if it is in a revocable trurst as many homes today are held that way then a home loses its protective status .
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Old 06-20-2016, 06:45 AM   #8
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Tell your relative to start working with social services,if his spouse spends down the 125K in a nursing which would last around 2 years, he doesn't have to sell his home, he will get to keep his home and some money to live on. Social services might put a lien on his home that would be payed after he dies or no longer lives in that house. Look into this first...

Doesnt apply to assisted living, different rules than nursing homes.


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Old 06-20-2016, 07:14 AM   #9
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Well I had a family member with dementia add that to being 90 years old and this is probably what they need to work towards, I can't imagine it would be too difficult to get rated for nursing home care. I still give the advice to go to social services before getting a reverse mortgage.

Are you one of their kids or do they have kids to help them wade through this,get an elder care attorney ASAP.
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Old 06-20-2016, 11:12 AM   #10
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Have attorney, she is in an assisted living facility with a locked unit where she is doing well. Nursing homes with locked dementia units are not very nice around here. That would be bad for her. Many homes dropping locked units due to xtra cost of regs in my State. Hence the question on reverse mortgages.


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Old 06-20-2016, 11:31 AM   #11
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I would consult an elder law attorney. In some jurisdictions things can be done so that an otherwise wealthy person can still qualify for a Medi-Caid paid nursing home. It's at least worth the consultation I think. Look for an experienced elder law attorney in your relative's state.
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Old 06-20-2016, 11:45 AM   #12
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Another option to get money without all the fees would be to just get a HELOC. That of course does require a monthly payment, but in the end it might be better way to get some money out of the house. Just compare overall fees and costs, but I have heard that reverse mortgage is something try and avoid.
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Old 06-20-2016, 11:45 AM   #13
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With 150K you have some time,keep your eyes open for an acceptable nursing home her physical condition could change in an instant so you will need this option anyway.
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Old 06-20-2016, 12:17 PM   #14
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With 150K you have some time,keep your eyes open for an acceptable nursing home her physical condition could change in an instant so you will need this option anyway.
+1
Overall, reverse mortgages are expensive. Time to explore alternatives, hopefully through an elderlaw lawyer.

Whether this site has an answer to your question or not, associated questions involving older people may help with other issues that may arise.

ElderLawAnswers

In my opinion, elderlaw involves more than just legal opinions. It's more ike a guideline to the way seniors are seen in an aging society.

I believe that, faced with imminent decisions or not, everyone who has cares for others or for his/her own estate, should read through some of this website. In general, much advice that comes through on ER forums.. while well intended... is either wrong, or not applicable to individual situations, especially involving state laws.
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Old 06-20-2016, 01:21 PM   #15
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Thanks all for info. Much investigation and alternatives explored, reverse mortgages just one of them but a black hole for me, dont know much about them.


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Old 06-20-2016, 02:22 PM   #16
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In general, much advice that comes through on ER forums.. while well intended... is either wrong, or not applicable to individual situations, especially involving state laws.
+1.

Yes, elder law and Medicaid rules do indeed vary widely from state to state and individual circumstances vary from family to family. I agree with you advise to find an elder law attorney you trust and listen to the advise.
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Old 06-20-2016, 02:43 PM   #17
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We used a reverse mortgage to help MIL (a widow with no dependents) improve her quality of life. She was living in a nice, paid-for condo, driving a reliable automobile and had nice furniture, clothes and personal items. But, when she ran out of savings, she was cash strained trying to live on only a modest SS income. We wanted her to spend more on the day to day quality of her life.


While MIL's 4 children have a good relationship, they are dispersed geographically and march to their own drummers. We all agreed it was important to not have one of them in a position to either benefit or be deprived due to assuming any financial role with MIL's situation. That is, peace in the family was given a high place when we listed goals while developing a plan.


After significant research, we assisted MIL in obtaining a reverse mortgage which gave her a line of credit to draw from as desired and guaranteed she could stay in the condo as long as she could pay the taxes, HOA fee's and utilities even if she spent down the line of credit over the following years. (She was in her early 80's at the time.)


The reverse mortgage was more expensive than some other alternatives we looked at such as having one of us buy the condo and lease it back to her or getting a heloc. But the reverse mortgage was very "arms length." None of her children was holding the title. No one had to monitor whether heloc payments were being made, etc. No siblings were either getting a financial advantage or disadvantage depending on the current market value of the condo, etc.


The reverse mortgage was established around 2006 or 2007 while the value of the condo was very high. In 2013, when she entered a nursing home, the condo had dropped in value significantly. The balance of the line of credit was greater than the then estimated selling price of the condo. So, in order to enter a top notch NH as private pay, she (with help) cashed out the balance of the line of credit and relinquished ownership to the mortgage company. The way things worked out with the housing market, the balance of the lineof credit at that time was more than the condo would have sold for despite the fact she had already withdrawn from the line of credit for several years. Instead of being upside-down in a mortgage, she was protected from the real estate crash by the residual value of the line of credit from the reverse mortgage. That is, the line of credit was not diminished by the condo dropping in value.


After about two years in the NH, funds ran out and she was put on Medicaid. Because she was private pay for a significant period of time, we were able to get her into a NH where the vast majority of clients are private pay and no one is accepted who doesn't start as private pay. In Illinois, this is a great advantage since the state is a very, very slow and low Medicaid payer. Many NH's that will take you as Medicaid from the get-go, or Medicaid after only a short time as private pay, often have "issues" and are to be avoided.


A reverse mortgage may or may not be a good move for your situation. Do your homework and understand all the alternatives and how the different solutions apply to your individual circumstances. Try to avoid listening to generalities and remember than any one example may not work out the same way for you.
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Old 06-20-2016, 08:51 PM   #18
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Youbet - thanks for sharing. It's good to know that a reverse mortgage worked out well in your situation. I'm sure there are circumstances where it makes perfect sense.


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Old 06-21-2016, 08:19 PM   #19
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Thanks Ubet!


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