As baby boomers reach retirement age, many people wonder how they will pay for their expenses during their senior years. If you are a recipient of social security or Medicare in Wisconsin, you want to be careful to protect your benefits. There are some things that could impact your ability to receive payments or benefits and you want to avoid those. You want to make sure that you continue to get the payments that you deserve. One consideration for seniors is a reverse mortgage. If you are considering a reverse mortgage you will want to learn as much as you can before you make the decision. An experienced elder law attorney can assist you in choosing the best path for your needs.
What is a Reverse Mortgage?
If you own a home, you likely have been paying your mortgage for many years. You have established quite a bit of equity in your home, but it is not doing you any good until you sell your house. A reverse mortgage is a loan that you take out against the value of your own home. It is money that you borrow from your home. You do not need to make monthly payments. Instead, the entire amount of the loan becomes due at the time the owner leaves the home, sells it, or passes away. Rather than paying the loan, the house can be forfeited. Therefore, no further money is necessary and the loan is complete.
Benefits and Disadvantages of a Reverse Mortgage
Reverse mortgages are typically available to those age 62 and over. A reverse mortgage allows you to receive money from the equity you have already invested in your home. As a retiree, you may need some additional funds to pay your expenses, medical care, and more. You can have access to money that is already yours. A reverse mortgage can give you extra money and peace of mind that you can afford to live in your golden years. A reverse mortgage may not be right for you if you want to make sure that you pass your home along to your beneficiaries after your death. With a reverse mortgage, your family will need to repay the outstanding loan if they wish to retain the house.
Does a Reverse Mortgage Affect Social Security or Medicare?
A reverse mortgage does not affect standard or disability social security or Medicare. In fact, you can utilize your social security payments to prove income during the loan approval process. You will still be entitled to your regular social security payments and Medicare benefits because these are not need-based. However, if you are the recipient of supplemental security income, (SSI), a reverse mortgage will impact you. As an SSI recipient, you must report money you receive through a reverse mortgage as income unless you use it in the same month that you received it. It is important to understand the impact of a reverse mortgage before you enter into this type of loan agreement.
Contact Moen Sheehan Meyer, Ltd. today at (608) 784-8310 speak to an elder care attorney.