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Tuesday, November 2, 2010

Reverse mortgages: the good, the bad and the ugly

This article by Audrey Miller discusses the pros and cons of a senior taking a reverse mortgage to provide cash to allow the senior to remain longer in his or her own home. Click here to read it. The article raises an interesting point - a reverse mortgage is repaid when the homeowner dies or sells the house, which may leave less money in the estate.

Some parents specifically say that they want to leave as much as possible to their children. Sometimes this is because a child is handicapped and will need to be provided for. Sometimes the child lives with the parent and devotes much of his or her life to helping the parent. In other cases, the parents just want to help the kids in general and make their lives a bit easier. Regardless of the motivation, as a person considering taking a reverse mortgage, the idea of leaving a larger estate is something for you to seriously consider. If leaving the maximum amount in the estate is important to you and there are other ways of affording to live at home, perhaps a reverse mortgage is not the best way to go.

My personal view on this issue is that the senior should do what he or she needs to do to live the way he or she feels safest, happiest and most comfortable. If this means less money for the children later, so be it (with the exception of a handicapped child). I've seen many seniors living in poor conditions, with inadequate nutrition and insufficient assistance, just to leave an enormous estate to the children.

Many parents naturally put their children ahead of themselves, but sometimes they take it too far.

1 comment:

  1. Nice site , first time at your site and I really enjoyed reading it. I will come back again in the future to check out some of the other articles.

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    ReplyDelete

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