#17 Reverse Mortgage Offers Solution for Mom and Daughter
DAUGHTER WANTS MOM INDEPENDENT
As an only child, daughter of a mom who was widowed 2 ½ decades ago, you were always taught to be independent and financially responsible. Now married with children of your own, you maintain close ties with your mother, who lives in the family home less than an hour away. While the two of you never directly discuss either her finances or yours, you sense that Mom is just barely managing to cover her lifestyle expenses.
Mom has shared with you her desire to remain in the home for the rest of her life (as opposed to moving into a retirement community). In order for her to be safe, however, you realize certain modifications need to be made to the house itself. You are aware that Mom has aLong-Term Care insurance policy, which she has so far not needed to use.
You are not in a position to offer meaningful financial help; in any event, your mother would be hurt by such an offer. A reverse mortgage might provide a solution, allowing your mom to cover the costs of the remodel and to supplement her income as well. Since she would be using “her own” housing wealth, your mother’s desire to operate independent of your help would be satisfied.
With a reverse mortgage line of credit, your mother could take a one-time “draw” on to make the needed modifications to the house. Then, through either periodic, tax-free “draws” out of the equity she’s built up in your home, or through converting the mortgage into a lifelong “annuity” payout, she would supplement her monthly income.