Adult Children
Adult Children Helping Their Aging Parent
Often adult children are financially burdened to help their aging parents, while also raising a family of their own. Some see the struggle their parents have and are concerned they will outlive their financial resources.
If you are looking for options to help your parent(s), a reverse mortgage may be the answer. By tapping into the home equity they've built over their lifetime, they can put their hard work to use now when they need it the most.
When considering a reverse mortgage, there are several factors to balance.
Benefits of a Reverse Mortgage:
- Seniors can age in place by utilizing the equity in their home for costs such as in-home care, medical costs, home renovations for mobility and more.
- Income from a reverse mortgage is typically tax free (please consult a tax professional to learn more).
- When compared to personal loans or credit cards, reverse mortgage interest rates of usually lower, plus don't require monthly payments.
- The HECM for Purchase option allows seniors to downsize, relocate to be closer to family or to find a more mobility-friendly home.
Things to Consider:
- Reverse mortgages accumulate interest throughout the loan period, meaning the debt grows if the senior does not repay the loan.
- It is crucial for your parents to stay up-to-date with property tax payments and homeowners insurance premiums to keep their loan in good standing.
- In the event of a senior's passing with an outstanding reverse mortgage, the balance must be settled by their estate or heirs if they intend to retain the house.
- Additionally, reverse mortgages may impose borrowing limits over time.
Understanding every facet of a reverse mortgage is key to making a well-informed decision. This ensures that your parents can sustain their independence while receiving financial aid in their retirement years. With guidance from an expert like Robb, you can navigate the choices that best suit your family's future needs.
Robb Hamilton
NMLS# 358150
Broker License #2407110
This material is not provided by, nor was it approved by the Department of Housing & Urban Development (HUD) or by the Federal Housing Administration (FHA). It is not intended to be a substitute for legal, tax or financial advice. Consult with a qualified attorney, accountant or financial advisor for additional legal or tax advice.
*There are some circumstances that will cause the loan to mature and the balance to become due and payable. The borrower(s) must continue to pay for property taxes and insurance and maintain the property to meet HUD standards or risk default. Credit is subject to age, minimum income guidelines, credit history, and property qualifications. Program rates, fees, terms and conditions are not available in all states and subject to change.
Homeowners must be 62 years of age or older and live in the home as their primary residence. Homes must meet FHA/HUD minimum property standards. Borrowers must maintain hazard and flood insurance premiums, property taxes, utilities and make any property repairs. Although there are no mandatory monthly principal and interest mortgage payments, interest accrues on the portion of the loan amount disbursed if no payments are made. Program rates, fees, terms and conditions are not available in all states and subject to change. At the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds. Charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees. The loan balance grows over time and interest is charged on the outstanding balance. The borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home. Interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment.
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