What Do You Know About Reverse Mortgages?

May 18th, 2010

It’s time we made our last move – to the retirement home
It’s not that we’re old and feeble, we’re just old. Old is a matter of the mind, the years don’t count. If you feel old, you are old, simple. If one is healthy and mobile you are not really that old, at least not com pared to the much younger people we see being wheeled around in the shopping malls by their care-givers. You see us in the shopping malls too, but we’re running from shop to shop, chasing their special offers. Having said all that, I still find myself reading the retirement home ads in the newspapers…

Our lives
Our day-to-day lives are great. I go to the gym across the road a couple of times a week, but just to use the treadmill. My wife too, attends an exercise class. She plays bridge a few times a week and I attend a painting class at the local art school and do a bit of painting at home. We both drive the car and we still travel whenever we get the chance. I am still attached to an engineering office but most of the work I get is by email and my trips to the office are few and far between. My wife cooks and so do I on occasion. The children and grandchildren are invited for family dinners and we cope with all that.

The retirement homes
There seem to be many different kinds. Some have frail care and others don’t. Some are rental units and others are for purchase. I haven’t bothered to find out the terms and conditions, but from what I read in the ads, they all have one thing in common – they are very expensive. I certainly don’t have that kind of money at this stage of my life. Besides the purchase price there is the monthly maintenance charge, also very expensive, way beyond me.

The reverse mortgage
Some mortgage banks, aware of the situation that the elderly among us find themselves, (and looking to profit from this situation) are offering reverse mortgages. If you own an apartment, or possibly even own most of the apartment, you may qualify for a reverse mortgage, meaning that you can borrow money against your apartment to buy a unit in the retirement home. This opens a whole slew of possibilities for the elderly who cannot afford to buy into the retirement home.

The viatical option
There is another option for the elderly who wish to raise money to enter a retirement home – viaticals. A viatical insurance settlement is an agreement in which a third party buys a life insurance policy from an insured person and thus becomes the legal beneficiary of the policy. The insured person receives an immediate cash payout and in most cases the buyer of the policy agrees to continue to pay the premium on the life insurance policy until the death of the insured.

This entry was posted on Tuesday, May 18th, 2010 at 8:48 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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