What is the best reverse mortgage for elderly disabled people?

I had a friend who had a reverse mortage on the family home. When he died, his wife had to either buy the house from the mortage company or move out of the house because she was not listed on the mortage or title as an owner of the house.

Suze Orman has done podcasts on the dangers of reverse mortgages.

In my humble opinion there is no such thing as a good reverse mortgage. Forget that route to make money.

My MIL got one of these. The hidden fees were enormous. Her fully paid for house became the bank's house in just 8 years. Not only that, if she had been absent from her house while still living for 30 days the lender had the right to take possession of her house, liquidate the loan, and give her what small amount might have been left after all the "expenses." This would really be a last choice for me. In fact, I think I would sell the house outright and use the proceeds to rent an apartment before I would give my house to these crooks.

Get your answer from the professionals on this. Download the Suze Orman app on google play or apple apps. Women and money community app or search on her podcast and listen.

Imho, I highly discourage a reverse mortgage as I've heard a lot of negative press on RMs. Seek another option.

We looked into a reverse mortgage for my mom to help pay for 24/7 care. Unless your dad's house is very high end, this is not a solution. They only loan you a certain % of the value of the home and your dad must be competent enough to go through counseling unless you have power of attorney that gives you the authority to sign for him. In my mom's case, the loan would've only given her about 8 more months in her home. Definitely not worth all the time and hassle.

We got a reverse motgage this year. It was not a quick process. Dh refuses to sell so it was the only option. We had a counseling session (required by the gov't) which included a third party (our son). Then we were given an approved list of lenders. We contacted the ones most local to us. After phone consults we then chose one to come to the house and talk to us face-to-face. We felt he gave us enough information about the process through the bank he represents that we then chose to get the RM through him. He was very clear about the negatives and the positives. As someone else said, we are still responsible for upkeep, insurance, and taxes. We can pay back anything we've accessed whenever we want. (There is probably enough inheritance in my future to take care of that.) We still live as frugally as possible.

I'm not quite sure what kind of arrangements your dad could have made while being a patient at a rehab. I wouldn't do a reverse mortgage for one reason - what if he outlives the money mortgage company gives him up front? Then he's back to square one.

Assuming there is no family to provide the 24/7 care for him and his finances do not allow for that sort of care, you need to be talking with the social worker at the rehab to be sure they understand he cannot return home while he requires caretakers to be with him. While they are asking you questions - they should ask you about the safety in his home. At this point, you tell them it would be totally unsafe to send him home because he lives alone. You can point out what they currently do for him at the rehab to drive this statement home to them. No one at his home to help him...period.

He will probably need to be moved to another type of facility depending on his needs and finances. If he has too much money in bank accounts or other liquid assets (not his house, car), he will use that money to self pay until it runs out. Then he should be able to transfer to Medicaid bed - or if Soc Security/retirement is enough, he may just continue as a self pay.

I don't think either of you is prepared for him to return home in the next few days so a discussion with the social worker for other placement would be the quicker response to his situation.

1. Reconsider if he really needs round the clock care. It may be true...or maybe he can be helped with 2 shifts so long as someone is there to help him up in the AMs and into bed in the evenings? Get a knox/lock box with the local fire dept so they don't have to break in if there is an emergency. Check with a local office on aging in re to any necessary home modifications if needed to make things safer...like an emergency button alert.

Do not do a reverse mortgage without being fully educated and/or advised on it. The investment of time and money with a certified elder law attorney will save you and your father much grief in the long run. Everyone's financial situations are different and even with a reverse mortgage the value of the home will eventually run out with 24/7 care and then he will wind up elsewhere anyhow.

They’re a huge gamble and most of them end up in foreclosure once the elder has been out of the house for a year. The companies almost always short sale them and you end up still owing money and have no house. BEWARE.

eegh!!!! The home will be lost!!!!!
If someone in the family can do this, it’s an painless way to save some money.
What we did was draw up a contract with a lawyer agreeing to give a monthly amount (with 1% interest).
When your Dad passes, you’ll have preserved the value of house, as well. When house sells, that debt, your accumulated amount, will be repaid at the time of sale. Make sure it’s a legal document.

Reverse mortgages look to me to operate about the same as a casino. The house always wins in the end.

These marketing techniques are used as bait directed toward vulnerable seniors who wish to believe that a reverse mortgage will solve all of their problems. It’s sad.

At least at a casino there is a slim chance of winning. That is if the person gets up and walks out of the door with money in hand. Habitual players will end up putting all their winnings back in the machine. It’s a mind game. Don’t fall for it. It’s entertainment. Gambling isn’t a guaranteed source of income, even for professional gamblers. Reverse mortgages are the same. It’s risky. They are looking for desperate people to bite the bait. Don’t be tempted by these commercials for a reverse mortgage. Look for alternative solutions for help.

Naturally mortgage lenders are in it for a profit. They are going to make money off of their customers or else why would they be in business.

My parents had a reverse mortgage, they got it when they first came out. It happened to work well for them, however you are still responsible for paying for any repairs the home may need while living in it. You are responsible for keeping insurance on the home and once a year when you receive your insurance coverage statement you must supply a copy of it proving it is insured. If you don’t they will insure it and take it out of the mortgage money. You also are responsible for paying the personal property taxes on the home. They can be good things as long as you plan for the above expenses. As to whether it will be enough for home healthcare is another matter. I lived with my father to take care of him after my mother died, I did end up having to hire a healthcare worker to come in to give me a break 3 days a week, it cut into the budget significantly but was well worth it for saving my sanity.

The effect of compound interest is something people forget to factor into RMs. When the money gained from the reverse mortgage runs out, what will he do then? He could live for another 25 years and the money drawn down won't last that long. If he has no money, he may be able to get help at home for free now while still retaining ownership of the house (with a lien on it for when he dies) which at least provides security if he remains in the house and provides money for later if/when he needs AL. Explore all alternatives very carefully. A RM is a Get-A-Little-Now but Pay-All later situation. Once the house is gone, it's gone. As years go by and people realise the real cost of compound interest, sadly many will regret "giving away" their principal capital asset.

Your profile mentions dementia. There are varying levels, but if he is not in the early stages, it isn't likely he could arrange a reverse mtg anyway. One has to be competent to sign documents, and without expert help on your side, the people "selling" the RMs won't give a hoot. Hopefully you already have some of the more important documents in place, like POAs. If not, consult with EC atty asap. Mom was in early stages - we had done all the documents, but needed some updates. The atty took her aside and questioned her, which allowed him to say she could still sign what we needed.

If/when you find an AL for him, you would want these POAs in place, so you sign for him AS his agent. You should not sign anything, not AL, Medicaid, nothing, as yourself (your signature, but followed by DPOA.) If you don't have these documents (including will, medical POA, financial POA, etc), the atty would have to determine if he was competent to sign for them. If not, you would have to get guardianship in order to make decisions for him, sign documents and manage his finances.

Given all the issues he has, he might not outlive the RM, but as someone else pointed out, what if he does? Then he has nothing.

Also, the amount of care he would need at home would likely be a lot more than you think! Some see the amounts AL, MC and NHs get and think it is less exp to bring in help, but in reality it isn't, not if they need full time care. We paid to have someone check on our mother, 1 hr min/day, and it was $20/hr. That was years ago, just a CNA, no nurses, and costs vary wildly from one region to the next. Using that old figure, 16h/day (excluding 8 hr for sleep, although he may not sleep!) for a year would cost almost $117,000. Don't forget to tack on RE taxes, utilities, meals, maintenance, etc. It is WAY more expensive to have full time care at home!

As for what he can/can't do in AL, you would have to check various ALs and ask a LOT of questions. Draft up what questions you can and take notes. Cost, what that cost covers, what extra charges there might be, do they have MC (assuming you want to start with just AL) he can transition to if needed, etc. I know that my mother's facility (IL/AL/MC) allows residents to smoke outside (not the MC residents!), but that is just one place. Each place would have their own rules, regulations, costs, care plans, etc. I wouldn't think his radio equipment would be an issue, so long as it doesn't take up ALL his space in the room! If an outdoor antenna is needed, you would have to ask about that, but it should all be on your list of questions to ask. Add more Qs as you get responses, more than likely the answers will result in more questions!

Might be good to work on getting legal consult, while you explore the ALs. For the short term, if he is to go home soon, you'll have to care for him or pay for care. If his income is low enough, he might qualify for Medicaid, but they will put a lien on the house. Either way, more than likely the house will be "lost", unless he doesn't live too long. The other option is to sell it and private pay until he runs out, then go for Medicaid. Caveat: Medicaid covered AL is a rarity, but if you think Medicaid might be in his future, you have to narrow your search for places that might accept it. This is why you should get legal consult while looking for an appropriate place for him. Many EC attys will give you maybe 30 m free consult, so have all your questions ready before you go and like checking AL, take notes!

Best of luck and do stick around, come back and let us know how things went!

I am really tired of the Tom Selleck commercials,, mom and I see them all day long on her channels.. as if he needs one! look into this carefully as they can backfire on you!

rcv, you will need to do research in your area. Assisted living is so wide ranging that it is hard to say.

My dad had several people that smoked where he was, they had outdoor areas set up to accommodate them. My dad had a little dog that they helped with. Another guy wanted to have coffee and walks all the time and they did their best to keep him going. Other places refused the dog and no smoking areas. I had to look at many places before I found one that he could afford and seemed to offer the best fit.

Make a list of what is really important for your dad and ask lots of questions. When you narrow it down make the facility put things in writing to ensure you are not surprised. I would also ask if they have others that have these hobbies.

Get a needs assessment from rehab. This will help you find the right place.

I need some information on assisted living. If my dad can not stay in his home, I have to sell him on the assisted living. Will he be able to smoke his pipe? Will he be able to take his hobbies with him? (radio and communications equipment)
He's a HAM radio operator. Are there different types of assisted living?
Any help is appreciated.

Your father is 68. I see from your profile that he has a world of health issues, but he's 68. He could live for decades.

What happens when the money runs out? Then he will have no house, no home, and no capital to pay for care.

As a recent amputee with - to pick two - diabetes and dementia, it would be surprising if he were in any fit state to make major long-term decisions. In your place, my first step would be to consult the discharge planner at rehab. Does your father have any other savings, capital, investments? What's his income? - the reason I ask is that his level of care may reduce in the short to medium term, and it may be that for a limited length of time there are other ways to find the money.

There are precious few circumstances in which reverse mortgages are the right choice; and I don't think this is among them. Certainly do not arrange one for him without first-rate advice from a reputable elder care planning specialist.

I don't agree with RealyReal this reverse mortgages are always a bad idea. There are circumstances when they are a good idea. But I do agree that you need expert guidance, Elder Law Attorney or Fiduciary to explain when it is a good idea and when not. Often the monthly income and assets for draw down from a reverse mortgage can prevent your getting medicaid as needed. A home as asset need not be sacrificed for getting medicaid (tho recovery will occur after death).
For my MIL her reverse mortgage was a godsend. She had a valuable and fully paid for home, and had only social security. She was determined to stay home and had no funds to pay for the care she needed. The reverse mortgage on her home allowed her to hire care and remain home until her death. Then her son, my partner, sold the home, paid off the reverse mortgage, and as her heir recovered the remainder asset in the home.
As I said don't move on this by what the reverse mortgage company says; and some of them are little better than crooks. You need someone who understands whether this is a good idea for this senior or not. We have had people on forum whose elders were convinced they got to meet the actor in the most common commercial out there if they got one. We have had seniors who had the bad idea to take one to pay for long term care insurance (yet another thing you shouldn't get without knowing all the ins and outs of the contracts.
Good luck. Get expert guidance on this. So many things go beyond the pay grade of those of us giving out advice on the forum. Hope you will update us on how you move forward.

I don't recommend any reverse mortgages. They don't really benefit anyone but the lender.

Call and get a couple of different contracts and read them, using a dictionary to look up every word and be sure and look up what that word means in the lending world.

If your dad needs long term care, he may need to sell his house and use the money to pay for a facility. Just because he doesn't want to not be home doesn't mean that you need to jump through flaming hoops to accommodate him. He needs to participate in decisions or he isn't able and that means he doesn't get a say.