DW & I are happily retired, with enough income to live comfortably. Both house & rental properties are mortgage-free, & living on Oahu is a HCOL area. Our real estate assets have been increasing in value since we bought them, as are our property taxes. Bought the house for $325K in 1993, & it's appreciated $1,167,000 since then. Even with the pandemic, the chances of a local market collapse is zero
None of our 3 kids or 3 grandkids is the least-bit interested in living out here in Hawaii, let alone in our lovely custom home, with a walkway to the ocean. Okay, so be it.
Wife & I are at odds on a reverse mortgage. She hates the idea, while I'm for it. With a current market value of about $1.5 million, a RM would give us about $765,000 as a lump sum. We've already heavily updated the house for our old age (74/67), & plan to stay here until the bitter end. We're both active martial artists (once we're out of lockdown), so we aren't on our last legs.
So, where is the downside to a RM? When we pass, our son (who lives in Japan) will be the Executor, he will just sell the house, & the RM will be paid off, with any excess funds going to our estate. So, less money for the estate distribution, but a nice chunk of change for us to use, while we're still young enough to enjoy it. That use may include long-term care, but at least we wouldn't have to sell the house or rentals.
BTW, with the sale of the rental properties, there will still be several million in the estate, not including our other liquid & non-liquid assets, so it's not like we're shorting anyone's inheritance.
Pros? Cons?
None of our 3 kids or 3 grandkids is the least-bit interested in living out here in Hawaii, let alone in our lovely custom home, with a walkway to the ocean. Okay, so be it.
Wife & I are at odds on a reverse mortgage. She hates the idea, while I'm for it. With a current market value of about $1.5 million, a RM would give us about $765,000 as a lump sum. We've already heavily updated the house for our old age (74/67), & plan to stay here until the bitter end. We're both active martial artists (once we're out of lockdown), so we aren't on our last legs.
So, where is the downside to a RM? When we pass, our son (who lives in Japan) will be the Executor, he will just sell the house, & the RM will be paid off, with any excess funds going to our estate. So, less money for the estate distribution, but a nice chunk of change for us to use, while we're still young enough to enjoy it. That use may include long-term care, but at least we wouldn't have to sell the house or rentals.
BTW, with the sale of the rental properties, there will still be several million in the estate, not including our other liquid & non-liquid assets, so it's not like we're shorting anyone's inheritance.
Pros? Cons?