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Can a Reverse Mortgage Help Pay For Care?

Can a Reverse Mortgage Help Pay For Care
A stroke is never expected and when it happens, it is a sudden and drastic life-changing event. Most people only think of the physical challenges associated with a stroke, until it happens. Once a stroke happens to you or your spouse the hidden reality is stroke is equally challenging financially.

Acute stroke care, stroke rehabilitation and ongoing care are expensive and most insurance policies have limited coverage. For most couples or individuals, their home is their single largest asset and a reverse mortgage may be a financial tool to help pay for care expenses. Reverse mortgages allow those over the age of 62 to convert the equity in their home into cash without having to sell the home or pay additional monthly bills.

How Do Reverse Mortgages Work
In a regular mortgage, you make monthly payments to a lender. A reverse mortgage is the opposite; you receive money from a lender and don’t have to pay it back as long as you live in your home. Ultimately the loan is repaid when you die or sell your home.

Types of Home Mortgages
There are three types of reverse mortgages
1. Single-purpose reverse mortgages. These are offered by state and local government agencies as well as some nonprofit organization. These are typically the least expensive option but can only be used for one purpose.
2. Federally-insured reverse mortgages. These are also called Home Equity Conversion Mortgages (HECMs) and are backed by the US Department of Housing. HECMs can have high upfront costs and be expensive but they can be used for any purpose.
3. Proprietary reverse mortgages. These are private loans and fees and conditions vary widely.

Things To Look Out For
Some of those who offer reverse mortgage may try to sell you other financial products. Know that you don’t have to buy any other financial products or services to get a reverse mortgage.

Deciding how to pay for care is a big decision. Consider all your options and check with the following organizations as they may help you find less costly alternatives.
Reverse Mortgage Education Project aarp.org/revmort
U.S. Department of Housing and Urban Development (HUD) http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/hecm/rmtopten

By: Stroke-Network.com Staff Writer Amy McCraken

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