My parents are now in their golden years, and life is really not all that golden....they are in failing health, but really do not want to move from their home of 40+ years. Perhaps they could rent out some of those empty rooms to a care taker or live-in nurse? But where would they find the funds to pay for this?
For many seniors, the answer may well be in a reverse mortgage.
A reverse mortgage is a loan where the lender
pays you (in a lump sum, a monthly advance, a line of credit, or a
of all three) while you continue to live in your home.
With a reverse mortgage, you retain title to your home. Depending on
the plan, your reverse mortgage becomes due with interest
when you move, sell your home, reach the end of a pre-selected loan
period, or die. Because reverse mortgages are considered
loan advances and not income, the amount you receive is not taxable.
Any interest (including original issue discount) accrued
on a reverse mortgage is not deductible until you actually pay it,
which is usually when you pay off the loan in full.
Funds from a reverse mortgage may be used for living expenses, for in-home nursing care, for home improvements, for medical expenses or for other end-of-life expenses. It is an option that is well worth exploring for many seniors.