| Seniors looking for a way to boost income often | | | | origination, and the earlier they will be repaid. |
| consider reverse mortgages. Before you make the | | | | - Each states' Medicaid eligibility requirements vary, but |
| leap into this attractive way to tap your homes equity, | | | | as long as your home equity remains untapped and |
| you should understand fully some of the pluses and | | | | you are occupying your home as a primary residence, |
| minus' for this newer loan option. Reverse mortgages | | | | the equity is not considered an asset to Medicaid. |
| tap a homeowner's equity in their primary residence | | | | Once you tap the equity through a reverse mortgage, |
| either through monthly payments, one-time payouts or | | | | the income or one-time payment can be considered |
| as a line of credit. But, beware of lenders who rush | | | | an asset, reducing or eliminating Medicaid coverage. |
| you into the loan, without providing thorough counseling. | | | | Contact an eligibility specialist at Medicaid before you |
| -The amount a homeowner can borrow is based on | | | | take out a reverse mortgage. |
| their age, the current market value of their home, | | | | -Nursing home visits can also play havoc with reverse |
| interest rates and applicable fees when they apply for | | | | mortgage conditions. Lenders can remove owners |
| a reverse mortgage. | | | | from their homes after a specified period of time, even |
| -The up-front fees for a reverse mortgage are often | | | | a short-term nursing home stay. |
| much higher than other mortgage loans. These fees | | | | -While there are financial benefits to a reverse |
| are called in industry jargon; front loads. Higher interest | | | | mortgage, reputable banks and concise loan |
| rates, origination fees and points are a significant profit | | | | agreements laying out the ramifications of a |
| center for mortgage brokers. | | | | borrowers ill health are imperative to a successful |
| - To qualify for a reverse mortgage, a homeowner | | | | reverse mortgage. |
| must be at least sixty-two years old. However, lenders | | | | -Some senior homeowners decide selling their home |
| prefer older borrowers, as their remaining life | | | | and downsizing or renting is a better financial and |
| expectancy is lower. Banks are repaid when the | | | | lifestyle alternative for them than a reverse mortgage. |
| owner dies, so the older the borrower at loan | | | | |