Reverse Mortgages And Government Benefits

Reverse Mortgages And Government Benefits



Reverse Mortgages and Government Benefits
Reverse mortgages are increasing in​ popularity as​ a​ way to​ turn home equity into a​ liquid asset .​
Before you​ jump on​ a​ reverse mortgage,​ you​ need to​ understand the​ impact it​ can have on​ government benefits.
Reverse Mortgages and Government Benefits
The beauty of​ home ownership is​ found in​ the​ value of​ time .​
The longer you​ own a​ home,​ the​ more valuable it​ becomes to​ you​ as​ an​ asset .​
On one hand,​ you​ are paying off the​ mortgage over time,​ which is​ increasing the​ equity you​ have in​ your property .​
On the​ other,​ real estate tends to​ appreciate over time .​
This double whammy is​ what makes home ownership so attractive .​
As your grow older and retire,​ converting your home equity into usable cash becomes an​ issue .​
Reverse mortgages are touted as​ a​ solution .​
a​ reverse mortgage is​ essentially a​ loan against your equity that does not need to​ be repaid until an​ event happens,​ usually the​ sale of​ the​ home .​
Essentially,​ you​ have reversed the​ process of​ a​ traditional mortgage .​
The lender is​ now giving you​ money in​ exchange for a​ piece of​ your home equity .​
You can get payments in​ lump sums,​ monthly or​ through credit lines depending upon the​ particular package you​ go with .​
As time passes,​ the​ equity in​ your home is​ reduced,​ but you​ have a​ solid and predictable monthly revenue source.
In recent years,​ the​ government has tried to​ find methods for reducing the​ amount of​ benefits they pay out to​ citizens .​
One of​ the​ factors they like to​ use is​ the​ asset value you​ hold .​
If you​ have a​ certain amount of​ assets,​ your benefits are reduced or​ terminated because they government takes the​ position you​ do not need them .​
An analysis of​ government benefits is​ beyond the​ scope of​ this article,​ but reverse mortgages have an​ impact .​
Generally,​ taking a​ reverse mortgage on​ your home will not affect Medicare or​ social security benefits .​
This is​ true,​ however,​ only so long as​ you​ spend the​ full amount you​ receive each month .​
The magic number in​ this equation is​ $2,​000 for single homeowners and $3,​000 for couples .​
The government is​ always playing with benefit issues,​ so make sure you​ get up to​ date information on​ the​ situation .​
You want to​ understand what you​ are getting into,​ particularly if​ you​ are heavily reliant on​ Medicare for the​ payment of​ medical bills .​
In general,​ reverse mortgages do not impact most government benefits .​
That being said,​ make sure to​ get an​ informed opinion on​ exactly what will happen before you​ agree to​ a​ reverse mortgage.




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