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Take Pause Before Buying Into HECM Solution

Home equity conversion mortgages are available to individuals who are at least 62 years of age who own their own homes or have adequate equity. With these loans you receive payments from the lender who in turn is receiving equity in your home.

The loan becomes due after the borrower passes away or moves from the residence. Such a move would often times be a move into a long-term care facility.

The appeal of these loans is the fact that someone who is living on a fixed income can suddenly enjoy an infusion of cash.

There are however some pitfalls to take into consideration. One of them is the fact that you incur some significant expenses when you take out one of these reverse mortgages.

Interest is going to be applicable, and there are loan servicing fees. Appraisers and attorneys must be paid for their services, and you have to keep reverse mortgage insurance current.

So yes, you are pulling some money out of your home but you are not getting very good value considering the costs involved.

The estate planning implications are also something to think about. When you are using the equity that you have in your home while you are still alive you are steadily reducing your ability to leave something behind to your loved ones.

The wise course of action is to discuss all of your options with a good retirement planning lawyer before you take the plunge and agree to a reverse mortgage deal. Your lawyer may be able to make recommendations that enable you to go a different route that is perhaps a bit more beneficial for you and your family.

 

 

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Mark S. Eghrari, Estate Planning Attorney
Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill.
Latest posts by Mark S. Eghrari, Estate Planning Attorney (see all)
  • Special Needs Planning and Medicaid Recovery - March 21, 2019
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About Mark S. Eghrari, Estate Planning Attorney

Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill.

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