Many older Americans retire each year and have no adequate resources from which to draw funds to pay for medical care or simply to make ends meet. These retirees may have thought they had planned well for their golden years only to find that their savings were not nearly enough. Health care is so costly and most retirees cannot afford the additional costs of home care or residency in a nursing home. In some cases, it may just be having enough money to pay the normal living expenses that keep rising. This is probably why reverse mortgages are growing in popularity.
These reverse mortgages or also known as home equity conversion mortgages are seen as an alternative financial source to be used along with federal programs like Medicare and Medicaid to help pay the escalating costs of medical care. These types of mortgage plans can be used by senior citizens to help pay common monthly expenses as well as health care and even be used to pay for luxuries like vacations or new cars.
The reverse mortgages are backed by the FHA and the HUD and these federally backed mortgage programs are tax free. Although most people who take a reverse mortgage are over sixty-two, the money they receive from it does not affect the amount of their benefits from SSI or Medicare.
The payments on a reverse mortgage are made to the homeowner instead of the homeowner having to make the payments. Reverse mortgages do not have to be repaid until the recipient dies or moves into a nursing home. At that time the home may be sold to recover some of the money. Even if the recipient has been paid payments, which have amounted to more than the value of the home the selling price will not exceed the value of the home. As long as the recipient remains in good health and continues to reside in the house the payments will keep coming to them.
A senior citizen who is looking into the reverse mortgage plan as a way to obtain assistance in their finances after retirement should examine every other option before making a final decision. The reverse mortgage can be a genuine source of relief for someone who is no longer in the workforce and has few other ways to get funds to cover a medical emergency or any other type of sudden need.
A retired person will usually have their home paid for and the equity that is available is what the reverse mortgage is based on. The money, which is paid to them in equal monthly payments, can be used for whatever purpose they need it for. Home health care, prescriptions, doctor bills, or transportation to therapy sessions; all of these are reasons to seek more funding.
The cost of almost everything is increasing on a yearly and sometimes monthly basis, so it is very important to find resources to help finance our daily lives. The amount of income that might have been sufficient ten years ago will definitely not be nearly enough in another two years. The benefits from a reverse mortgage can be used to pay off an existing mortgage, some other loan, or any other outstanding debt. Home improvement projects and improvements in the home for their safety are good reasons to consider a reverse mortgage.