I found this article on reverse mortgages. Hope it helps.

Here is a link that might be useful: Reverse Mortgages

Be very, very careful. Make sure you, your mom, and her lawyer read the fine print very carefully. I've heard that the fees and charges are so great on those things, that you don't get anything near what your home is worth.

Wouldn't it be better for her to sell her condo outright, take the money and invest it, then move into a subsidized senior citizen apartment? My mom lived in one. Her apartment was huge, the management were always refurbishing this or that (replacing appliances, plumbing fixtures, cabinets--LONG before they needed it); redecorating (painting apts, re-carpeting and re wallpapering the hallways). The gals in the office made it their job to help the seniors living there with stuff like their medicare choices, senior services, etc. There were always activities, entertainment, and trips offered. Someone checked each morning to make sure each resident was okay.

This wasn't assisted living, understand, just the town's senior citizen apt. building. Mom had significant savings in the bank, but her rent was based on her income (just SS) and the management took into consideration expenses--health insurance, medical expenses, home health aids, medical equipment purchase. Mom's rent? Only $380 per month! But each resident is charged only what they can afford--some pay more, some less.

There are similar apt buildings in every town around here. My aunt lives in a similar building in another town (her rent is slightly higher, because she also has a pension from her work). Why don't you check your area, and see if there is something like that available for you mom.

I really think, before you let your mom give away her home, for a few $$$, it would be wise to investigate what other alternatives there might be for her right now.

They sure make it look darn good in the advertisements, but there again, you gotta be careful....I had ordered the tape and then of course they hounded me until I had to get alittle nasty to get the calls to stop.....

WHEN SOMETHING SOUNDS TOO GOOD TO BE TRUE, IF OFTEN IS!

Egads...sure do wish there was a spellchecker on the boards!

......IT OFTEN IS..... (This is what it should have read).

Azzalea, they DO factor in your investments and saving when you apply for subsidized housing.
Believe me, as a taxpayer, I don't mind helping a low income person a bit. BUT I sure am not going to do the same for someone with $100,000 stashed in their investment portfolio! Kathy

Kathy--my mother lived in a subsidized senior citizen apartment for over 13 years when she died. For the last 4-5, I was helping her with her finances, so I can assure you, what I'm telling you is accurate and true.

Yes, they look at your investments. Every Dec. Mom had to compile a bunch of paperwork for the management of her building--a complete list of her investments, her SS payments, her expenses (I outlined above). I can tell you this as the executor of her estate--she had close to $200,000 in the bank when she died. We've always been honest and above board, and given the management ALL that information.

And her rent was $380 (maybe it was $387?) per month. It did vary from year to year, depending upon how much she had in medical expenses.

Not here, the rule here is $1800.00 in assets..which seems reasonable. I paid $3000. a month for Mom and Dad..

I have several friends that sold their homes and moved into senior housing,and it was like Azalea said.They paid according to their income.Some here in S.Calif and i have a sister in N.Y. state living in senior housing,and another sister on the waiting list.

There is a big difference between assisted living and senior housing.

I've also been tossing around the idea of selling and moving,but i'm not ready to give up my gardens yet.LOL

Kathi

Well, I think, here you have to have sold your home 3-5 years before they won't attatch what you get from it.
Leslie

Leslie--that's for Medicaid. If you're going into a nursing home, and expecting Medicaid to pay for it, you have to divest yourself of your assests 5 years ahead of time.

What I'm talking about isn't assisted living or a nursing home. It's a regular apartment. The residents take care fo themselves, their own cleaning, do their own cooking in their own kitchen.

I think, perhaps some of the confusion here is that apples and oranges are being compared. Some people are talking about nursing homes, some are talking about assisted living, some are talking about Medicaid, and some are just talking about senior apartments.

One thing I didn't make clear--the thing is with investments, only the INTEREST counts as income when they figure your rent.

azzalea, your probably right. It is medicaid. My cousin is checking into something for her father. She's pretty shrewd when it comes to working around taxes and things. She had her dad sign everything over into her name, then she pays him whenever he needs money. But, this has only 2 years for him, so we'll see.
Leslie

I haven't heard of apartments like azzalea described, but it sure sounds wonderful. Plus you have peace of mind knowing there are people around in case your parent needs help.

Azzalea, how do you find out about such housing?

depending on any public funded programs for the future is a scary bet. being the child of 2 financial planners/cpa's i am very well informed on the future of US finances. many many famous financial experts (alan greenspan and warren buffett amoung them) are predicting the bankruptcy of medicaid and medicare in 10 yrs or less. SS apparently is bit more solvent at 20 yrs to bankruptcy. do you really want to put someone else's future dependent on that? and honestly if in the future we can't afford them and who is to say this country will be able to (i highly doubt there will be much of a fix given the economy) then what?? we can't even get regular insurance to the masses and that doesn't seem to bother alot of people. why would medicare/medicaid and SS going under bother those of us who will never see all the $$ we put in it any....

on reverse mortgages it is my understanding the deals USED to be much better for the homeowner but given the state of companies holding mortgages these days the fees associated w/ reverse mort. have skyrocketed. fees and charges eat away at what is paid out on a monthly basis and accrue over the period of the 'loan'. you need to definitely make sure to cover the length of time needed, i.e. planning on an elder to live well past their 90's otherwise when the time on the 'loan' expires the house/asset is gone and their very last yrs are left w/ nothing. also check into how reverse mortgages are handled in regards to declining home values, what may be worth $400K right now may only be $300K in 5-10 yrs and then their value runs out and the house is gone even faster.... there are lots of pitfalls but do your research and it may be what's best in your situation. ~ liz

Patti43

Where I live, every town has at least one senior citizen apartment building or complex. My town has three buildings in different locations. They're pretty well-known. If you don't know where they are in your area, try starting out calling your town hall and see what they offer. If they can't help you with information, your local office on aging or senior center should be able to point you in the right direction. I hope, if you or a family member needs this sort of facility, you find one. And, in our area, while they are technically 'low income' housing--they are definitely NOT low income TYPE places. They're luxorious places, the residents are mostly genteel ladies who have lived in town all their lives, who are usually widowed (men are at a premium in them, and have all the dinner invites they can handle, usually--LOL). They're clean, safe, well-run. And I've been to a number of different ones over the years, visiting family and friends. Very nice places.

I plan to put my name on the list for my mom's building as soon as I'm old enough (2 years away). It's a deal you just can't beat right now.

Yes, I do agree with the poster who said that we don't know what the future holds financially. BUT the fact is we DON'T know, so we have to proceed cautiously based on what's available at this point, right?

And my point originally was, do your homework, check out the options, and then make a decision. Bottom line is that's the best advice here, anyway.

Just yesterday I read an article in our consumer magazine about reverse mortgages. They warned as azzalea has, to be very careful and get good financial advice from an independent advisor before going ahead with one as it is very easy to come unstuck with one. Several subscribers reported losing their homes over reverse mortgages, which prompted the article.

I've had a Line of Credit for some time, backed by stocks and mutual funds. I can draw on it when I choose, in whatever amount I choose (up to my limit), and have a deal where I pay interest only, month by month.

Many people have arranged a Home Equity Line of Credit, which would allow your Mom to live in her home until she had drawn a large enough amount that it was at the top limit that they were allowing her. If the home price rises, that would increase her limit. The reverse mortgage people always allow margin to cover themselves in case of difficulties, and I'm sure, with the present housing crisis being what it is, they'll have added more restrictions, including allowing only a reduced percentage of the current value of the home that they're willing to lend.

Also, I think that in almost every case, they advance the full amount according to the contract, but your Mom doesn't need that large amount of money all at once.

While housing maybe in a slump for a while, and depending somewhat on the area, there may be a recovery later, and if prices rise prior to her being ready to move out, she would benefit from the appreciation.

A few months ago my interest rate was 6.25%, now it's down to 5.25%.

I'm rather an independent kind of person, like to be in charge of my business ... I don't think that I'd relate well to the restrictions involved with a reverse mortgage.

If you consider one ... as several have said - examine every term of the contract with a magnifying glass! And with a lawyer familiar with them at your elbow.

Good wishes for your Mom's success in finding the situation that's best for her.

ole joyful

I have become a skeptic in my old age. These companies are not seeking to give you a reverse mortgage out of the goodness of their hearts. They are in it to line their pockets. Like others said, be carefull....be very careful. DH & I live in senior housing where our rent is $337 a month. The rent has gone up and down each year depending on our medical ezpenses. It is a nice two bedroom apt in a well taken care of, apt house. Dottie