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Talking With Your Family
Talking With Your Adult Children About a Reverse Mortgage
Talking With Your Parents About a Reverse Mortgage
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With seniors living longer and baby boomers possibly having to take on the added responsibility of caring for them when they are ill, many older folks would rather take out a reverse mortgage than submit their children to this fate. In addition, approximately 40% of long term care is paid for by seniors. For those that cannot afford to do so, the children are forced to pay for these services. This poses a problem for a senior who wishes to live out his or her life independent of the children. It also raises issues among siblings about who will care for the parents.
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Imagine living in a home all your life and then suddenly finding that you cannot afford to pay the bills or other expenses associated with home ownership. Some seniors fear change and usually have a schedule they live by. They receive their monthly Social Security and pension checks and stick to their budgets. They treasure every moment of life in ways only they can appreciate. They ask for nothing other than being allowed to live out their lives in comfort and financial stability. However, if they become ill and cannot afford medical expenses or prescription drugs, their world can become stressful and challenging.
A reverse mortgage can alleviate the burden felt by seniors and their children and free their minds from worry. It is an alternative that is well worth investigating.
Talking With Your Adult Children About a Reverse Mortgage
Financial stress can be a difficult subject to discuss with family. Because of the potential effect on your estate, most financial advisors and reverse mortgage experts recommend that you include your family in the decision although this is certainly not required. Many individuals simply prefer that their finances stay private and choose to not share this matter with anyone.
Whether or not you decide to discuss this matter with your children or other heirs depends on a variety of personal and family factors. You may value their advice or want to know what they think. Or you may think it best not to discuss it before making a decision, or not to tell them after you have closed a loan.
Most children of reverse mortgage borrowers usually are pleased that their parents are able to use their equity and remain living in their homes. Often it is a great relief to these children that their parents are able to take care of their own needs, remaining self sufficient, and encourage their parents to do so.
If you do decide to first discuss your decision with your family, the following tips may ensure the conversation is well received.
- Be Upfront – Tell your children the facts about your financial condition. The tradeoff is simple. The homeowners receive an improved standard of living in their “golden” years at the expense of their estate.
- Be Realistic - More than likely, all remaining equity in the home will be used to pay off the loan balance leaving little or no equity for the survivors.
- Be Understanding – Your loved ones may not react in the way you initially expect. Keep in mind that they are more than likely only looking out for what they perceive to be your best interest.
- Educate them on the benefits of the reverse mortgage. The reverse mortgage will address your financial needs and allow you to remain in your home. Have them meet your advisors. Request a meeting or conference call with your reverse mortgage lender and financial advisor. Sometimes it is comforting for family to know that you are working with honest, competent advisors. Any competent qualified lender will be more than happy to discuss your situation with your family. Understand that the lender cannot talk to anyone about your file without your written permission.
You may want to think about whom else you should involve in making your decisions about a reverse mortgage. We would advise for you to have family members, maybe a trusted friend, or an advisor who knows your circumstances to help you with your evaluation and decision. You may want to invite them to your counseling session with a HUD authorized housing counseling agency.
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Talking With Your Parents About a Reverse Mortgage
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People are living longer, healthier lives-- and reaching retirement age no longer means growing old. Imagine if your folks have the income they need to remain living comfortable in their home-- and at the same time make much needed repairs, afford quality home healthcare or even vacation with family or friends. The reverse mortgage, can give seniors, aged 62 and over, the freedom and peace of mind to fully enjoy their retirement.
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With a reverse mortgage, your parents can receive a portion of their home value in monthly payments or in a “rainy day” credit line. They are able to use the value they have built up at the time they need it most. If they have an existing mortgage that is draining their income, a reverse mortgage may pay off that mortgage. There are no income or credit qualifications.
As the adult child, you gain the peace of mind knowing your parents are able to take care of themselves and not be living in financial distress. They are using their own money and not adding any additional monthly payments to their monthly obligations. They maintain their dignity and independence. Best of all, they retain title and remain living in their own home.
For most seniors, living independently in their own home is extremely important. A Reverse Mortgage may help your parents live well in retirement, in their own home, while giving you the peace of mind knowing they are able to take care of themselves and not be living in financial stress. Approaching a parent or loved one about their finances can be awkward or even difficult, but it is important to know that they can afford to eat well, make ends meet, afford quality healthcare, or enjoy the things in life that brings them happiness. Here are a few suggestions that can break the ice and make the conversation easy and effective:
Be Positive and Ready
Bring up the subject of their future needs when things are going well in your parents’ life, rather than at a time of stress or crisis. It’s best to take the time to discuss the topic as early as possible, so all details are in place for when a crisis does hit.
Involve Family
While you and your family are deciding whether you want your siblings there for the conversation, it is good to let siblings know that the conversations are happening. A sibling left out of decisions now might feel angry later.
Don’t Push
Allow your parents to make their own choices and resist the temptation to push issues unless their health or safety is in jeopardy. Show understanding by focusing on your parents’ needs, desires, and worries about their current and future living situation. Compare the costs and benefits of remaining in their home with that of an assisted living facility.
Ask, Know, and Share
Before you offer your opinion, it’s good to know what’s important to them—their goals, needs, and concerns about their current and future situation. Even what kind of assistance they would like to help them stay in their home. Share your own goals and experiences. Be sure they know that you are there to help. It might make it easier for your parents to accept help themselves.
Know Their Health Status
Be aware of any health problems and if your parents have the long term means to manage daily healthcare needs. Are they able to pay for the medications they need? Can they transport themselves to doctor’s appointments? Do they need in-home care?
Know Their Home
Take notice of the condition of their home. Do they need important repairs? Do they need a new hot water heater or roof? Are there safety issues? Modifications (hand rails, ramps, etc.) can be made to make their home more comfortable.
Research Community Resources
Look into community services specifically designed for seniors that may help make it possible for your parents to remain independent, such as local public transportation, meals on wheels, shopping services, or other home care services.
Compare Costs and Services
Check out the costs and benefits of remaining in the home with that of assisted living centers or continuing care retirement communities. Many of these are viable alternatives to remaining in the home.
Research Together
Offer information, such as our brochure that you can download here, in a casual way that lets them know you’re thinking of their well-being. For instance you can offer the Reverse Mortgage information as something you just came across and wondered if it could help them during retirement. You also could visit this website together, or use a search engine to seek the answers you need. All this can help reassure them that it’s their money and their decision.
Show Understanding
Be respectful of their opinions, even if you hear answers you weren’t expecting, or even don’t like. Talking about change can be met with negativity, even when it’s for the better. It’s difficult for anyone to ask for help from others. Stay positive and focused in the midst of emotions.
Seek Professional Advice
If you continue to have difficulty talking about their long and short-term finances, it’s not a bad idea to seek the advice of a neutral professional such as a financial planner.
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