Senior Citizen News
Did you know. . . .
. . . . that a REVERSE MORTGAGE is a loan option for senior homemakers, age 62 or older, whereby the homeowner’s lender or bank receives a security interest in the home and the homeowner then receives cash payment from the lender?There are several different types of reverse mortgages:
the homeowner receives a lump sum payment from the lender;
the homeowner receives monthly payments for life;
the homeowner receives periodic payments for a specified period of time;
a home equity line of credit is established which the homeowner can draw against at will; and (5) a combination of two or more of the above approaches.
The amount of money received through a reverse mortgage is determined by the value of the home, the interest rate and other fees charges, the loan term, the amount of any initial lump sum dispersed to the homeowner, and the homeowner’s age. The older you are, the more monthly income you may be able to receive. The money received, then, can be used for any purpose.
When the reverse mortgage has to be repaid depends on the type of loan. If the mortgage is for a set period of time, the loan will have to be repaid when the period ends. If the mortgage is for life of the borrower, the loan becomes due when the borrower dies, unless the home is the principal residence of a surviving spouse, in which case the money will become due at the surviving spouse’s death.
In addition, regardless of the structure of the reverse mortgage, the loan automatically becomes due if the homeowner sells the house or conveys title to the home to a third party. Seniors should also be cautioned that a nursing home stay of longer than twelve months may cause the loan to become due.
Finally, the homeowner is still responsible for paying property taxes, insurance premiums, and for maintaining the residence. Failure to do so will cause the loan to become due.
At the end of the reverse mortgage, then, the homeowner or the homeowner’s estate owes the lender only the loan balance or the value of the house, whichever is less. This serves as a protection should the house decline in value.
While a reverse mortgage may seem advantageous, there are several drawbacks and this type of loan may not be the best option for everyone. While a reverse mortgage will not affect an individual’s eligibility for retirement or disability benefits or Medicare, eligibility for need based programs such as Supplemental Security Income (SSI) and Medicaid may be affected.
There may also be hidden surprises such as expensive up front fees and monthly service charges. There also may be limits on the amount of money you can borrow depending upon which reverse mortgage plan you choose.
Finally, while the loan proceeds received by the homeowner are not taxable as income, the interest is not deductible by most homeowners. – Kathi Schear, Attorney At Law
DID YOU KNOW…..
That your choice on end of life issues can be heard and recognized, even if you are unable to speak? Most everyone is aware of the Terry Schiavo case in Florida that was predominant in the news recently. You can avoid this type of issue in your own life by have a Living Will prepared.
A Living Will is a document that will express your wishes that you do not want your life to be artificially prolonged if you are terminally ill or in a permanently unconscious state.
You will still be given care to make you comfortable and to relieve pain. However, your Living Will assures that you will not be given artificially or technologically supplied nutrition and hydration that will serve mainly to prolong the process of dying.
Also, Ohio revised their accepted statewide Living Will document in December 2004, to include your choice to make an anatomical gift of organs, tissues and eyes.
You can now specify certain organs or all organs that you wish to bequest. You can also specify the purpose for your anatomical gift as to how it is to be used, such as for transplantation, therapy, research, education or the advancement of medical or dental science.
The new Living Will also allows you to complete and file a Donor Registry Enrollment Form with the Ohio Bureau of Motor Vehicles.
If you already have a Living Will that was prepared before December, 2004, it is still a valid Living Will. If you wish to have a new Living Will prepared because you would like to make an anatomical gift, then you may do so.
If you do not have a Living Will or if you would like to have a new Living Will prepared so that you can make an anatomical gift, please feel free to give us a call here at Legal Aid at (614) 241-2001. There is no charge for anyone 60 years or older regardless of their income.
We do have available in our office the forms for anyone to fill out in order to do a living will.