Reverse Mortgages and Medicaid      

Get a FREE 120+ Page Book About Medicare. Click Here Now for Details!

There is a lot of talk these days about reverse mortgages, especially for retirees.  There have been good reports and bad. 

This is how a reverse mortgage works.  If you are 62 years old or older, you can apply for a reverse mortgage as long as you own your house outright or owe very little on it.  The idea is that you would have the cash to be able to use if you needed it. 

With a reverse mortgage there are no monthly repayments, so the good news is that you don’t risk losing your home.  The way this works is that equity is taken out of the home each month and paid to the borrower.  The borrower keeps the deed to the property – the lender does not get the deed like they would in a regular mortgage.

The program is federally insured, so that the government guarantees that the borrower will receive every bit of money they are entitled to no matter what.  If the lender goes broke or can’t pay, the government will pay the money to the borrower. There are also government rules about how much money can be charged for fees.  Period.  There are several different ways that the payments can be made, depending on what the borrower chooses. 

The important thing is that the payments are tax free, so they don’t affect your Social Security or Medicaid.

There are a few negative issues with reverse mortgages.  There is a ceiling on the amount that can be borrowed.  Up front costs can be high.  If you are on SSI or Medicaid you can lose benefits if you don’t spend down your entire loan amount every month. 

If you are thinking of opting for a reverse mortgage these are some important things to think about.  There are others, as well, so be sure to do some research.  Talk to an attorney, accountant and mortgage broker that you know and trust.  Check the internet for reverse mortgages.  Call AARP.  Discuss and research the topic thoroughly so that you will feel comfortable with your decision.

Reverse mortgages have become extremely popular and are an excellent choice if you are in the right situation to take advantage of them.

Entry Filed under: General-Medicare