Using Reverse Mortgages in a responsible retirement Income Plan discussion.

[Teacher Terry]

There’s instances where a reverse mortgage lender can foreclose. Two of those are if you are in a care facility longer than 3 months and if you aren’t maintaining the property to their satisfaction. Since it’s been a while since I looked this up this might no longer be accurate.

About 10 years ago I read a report about a poor black neighborhood on the east coast where many seniors had reverse mortgages. Then the area gentrified and became valuable and they used the property maintenance clause to foreclose on many of them. I will never get one.

 

[skyking1]

So. I‘ve got a scenario I could use some help with.
Couple isn’t wealthy and they are very responsible with their money.
They plain to age in place and are happy with the home. No payments other than monthly expenses and no children.

They have no LTC and will most likely enter a nursing home at some point. There they will probably spend down their money and then be on Medicaid for the extent of their stay.

Would it make sense for them to get what equity they can from the house while they are able to use it? It seems any money / equity they have will end up with the state at some point.

Or would trying to get them to sell and rent cheaply still make more sense? Their assets are around 800k in retirement savings, home value is probably 350k and they would receive 3500 SS when he files. They could live on what they have with no frills.

I guess one of them is concerned about “leaving money on the table”.

I’m not sure how to advise him.

Thanks!

My take is to leave things as they are.They will always leave some assets behind. They need a nice place to live and it makes no sense to shake things up to squeeze a few dollars.

 

[Murf2]

My take is to leave things as they are.They will always leave some assets behind. They need a nice place to live and it makes no sense to shake things up to squeeze a few dollars.

Thanks , I appreciate the response!