Unfortunately, many seniors find themselves without sufficient finances to enjoy a comfortable retirement. But regardless of what led to your shortfall, you may be able to supplement your resources either through a reverse mortgage or, for seriously ill individuals, a life insurance settlement.
In the case of a reverse mortgage, qualifying homeowners can borrow against the equity in a home without having to make any current mortgage payments. This is especially advantageous for older property owners who want to continue living in their own homes. While selling a house can be a fast way to bring in income, it doesn’t allow seniors to stay in the homes they love. Reverse mortgages are also a better choice than conventional home refinancing loans, since they free up funds with no requirement of immediate monthly payments. Borrowers can choose to collect their reverse mortgage funds as a lump sum, fixed monthly disbursements, or a line of credit.
Upon a homeowner’s death, the property can then be sold by heirs, and the funds used to pay back the debt. The homeowner’s heirs also receive any equity that remains in the home, and the repayment amount of the loan cannot exceed the home’s value.
For life insurance policyholders with terminal or chronic medical conditions, insurance death benefits can be used early to help cope with financial hardship. Known as a “viatical” settlement, this kind of life insurance transaction is typically tax-free for those expected to live for less than two years.
If you’re seeking information about the tax ramifications of these choices, turn to Taxation Solutions, Inc. Serving the Orlando area, we offer 40 years of experience in tax problem resolution for all types of issues. Contact us today!