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#81 Using a reverse mortgage to fund care costs


David Garrison
Home Equity Retirement Specialist
NMLS # 1595194
Serving the State of Indiana
p (317) 644-2595 c (765) 516-0130
e [email protected]

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

April 26th, 2022

After your father’s death three years ago, you moved your mother into your own home, remodeling a bedroom/bath/sitting room for her on the lower level of your house (using the proceeds from the sale of her condo). Over the course of these three years, you’ve hired various part-time senior care assistants, which worked out well for awhile; in fact your mother insisted on covering those costs herself. 

Recently however, to ensure her safety, you were forced to move Mom into a nearby assisted living facility where the availability of care is more consistent. Thankfully, your mother owns a long-term care insurance plan which should cover (after the six month “waiting period”), around half the monthly fee for the next few years. Still, you’re concerned about depleting your own retirement assets.

While you might consider renting out the space in your home that you created to house Mom, you might also consider using the equity in your home as a source of backup funding. As needed, you would use withdrawals from the line of credit to help pay for Mom’s assisted living costs. Of course, once Mom’s Long-Term Care benefits kick in, more funds might not be needed for awhile, allowing the unused portion of your line of credit to accrue interest. Until and unless you move out of the home, there will be no obligation to make payments on the loan.

A reverse mortgage is one way to “assist” with the costs of assisted living for Mom!