A Reverse Mortgage is a Safe Harbor By Michele Francis House November/December 07

10,000+ United States citizens become seniors every week!  If you are at least 62 years of age congratulations, you made it!  Time to enjoy family and friends, explore special interests, learn new skills and simply enjoy living life to the fullest.

At this wonderful time in your life you should not be troubled by bill paying, supporting your health, or holding off on things you want to do today until someday….Now is the time to enjoy!

If you have in fact reached 62 or your parents are seniors and have equity in their home, a reverse mortgage can turn that equity into cash, a line of credit, monthly income or a combination of all three.  In contrast to a forward or conventional mortgage, there are NO monthly payments and the proceeds are TAX  FREE.   In addition, there is no credit score requirement, income or asset check in order to qualify.  Most importantly you keep your home and live there for as long as you choose; you never have to relinquish ownership!

A reverse mortgage can provide the comfort of having more control over your estate and assure leaving a larger legacy for your heirs.  While a home may hold a great deal of emotional value for a family, the reality is that in most cases, the property is ultimately sold and assets are liquidated.  Heirs are often forced to sell the property in volatile real estate market or under the pressure of a quick sale.  Furthermore, heirs may be faced with inheritance and or capital gain taxes on the proceeds leaving much less than the actual value of the home.

Estate planning can be a daunting task however; the reverse mortgage is the perfect tool for the job.  Using a reverse mortgage to purchase life insurance you obtain the optimum result.  First, the reverse mortgage may lower any amount of estate tax on the property.  Some of the life insurance proceeds could be used to satisfy estate taxes, and upon the sale of the home, the heirs will realize a higher net return.  Secondly, if using the proceeds of the reverse mortgage to by additional life insurance for the heirs that purchase would have been made with tax free dollars.  When the policy pays the heirs, they receive tax-free dollars! 

Our next article will be a real case scenario of a customer you recently choose to use the reverse mortgage to access $2,000,000.00 for the purpose of providing for his children and their children’s’ education. 

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