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A reverse mortgage is a special type of
loan that is available to homeowners age
62 and over. The reverse mortgage allows
a borrower to cash in on their homes equity
without having to make monthly mortgage
payments ever again.
It can be used for a variety of needs such
as increasing your monthly income, property
taxes, home improvements, insurance and
even health care. A frequently asked question
regarding a reverse mortgage and Medicare
is – will monies from a reverse mortgage
affect Social Security or Medicare benefits?
The answer is no, because money received
from a reverse mortgage is tax-free. It
is considered a loan and not income.
Reverse mortgages are starting to become
popular with older Americans in need of
extra income and with regards to how they
want to receive long-term care. A borrower
can tap into their homes equity giving them
purchasing power, which in turn allows them
to purchase comprehensive long-term care
that they might not have been able to afford
without a reverse mortgage. According to
the National Council on Aging, older Americans
have almost $1.8 trillion tied up in home
equity. This means that reverse mortgages
have the potential to dramatically increase
the ability of homeowners to pay for long-term
care.
Unlocking reverse mortgage resources can
also strengthen community long-term care
services and reduce the financial load on
state Medicaid budgets. The purchasing power
of reverse mortgages will eventually enable
“house rich, cash poor” seniors to remain
independent and in their homes much longer.
The National Reverse Mortgage Group recommends
evaluating all options before choosing a
reverse mortgage. For more information,
visit the websites listed below.
Official
Medicare Website
A Resource for
Medicare Information
American
Association of Retired Persons (AARP)
National Council
on Aging (NCOA)
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