Children/Caregivers

At Plaza Residential Mortgage, we understand you want to protect your loved ones by making sure that no one takes advantage of them. Here are a few things about reverse mortgages we think you should know.

• Peace of mind - Like more than 150,000 Americans, your loved ones could benefit from a reverse mortgage. They are protected by the government and there are multiple safeguards in place to protect seniors from predatory lending practices.
• Children/Caregiver involvement – Many family members and caregivers are relied upon to assist in making financial decisions. Plaza Residential Mortgage urges our clients to include children and caregivers in their application process as much as possible to ensure the best possible decisions are made. We also encourage information sharing sessions with family members and caregivers to get them informed on the process.
• Safeguards - There are several safeguards in the reverse mortgage program that were instituted by the federal government to protect senior consumers. All applications must be taken in person to help avoid phone and mail scams. The government has also mandated that a third-party counseling session with AARP or a HUD-approved counselor be completed before an application can be processed. At Plaza Residential Mortgage, we believe these steps help applicants and their loved ones feel confident a reverse mortgage is for them before taking the next step in the process.
• Tap into home equity - Your parents or loved ones can now access their home equity without selling their home or making payments on a home equity loan. Payments on a reverse mortgage aren't due until the borrowers pass away or move out of the home.
• Maintain the title - Seniors who qualify for a reverse mortgage keep the title of their home. The Federal Housing Administration regulates and insures reverse mortgages to ensure that your parents and loved ones will never owe more than the home is worth and there is no risk of losing the home to the lender. Seniors can still bequeath their home to anyone they wish. Family members will be able to sell the home to repay the reverse mortgage, use other funds to pay off the mortgage, or take out a traditional mortgage.
• Repay anytime without penalties - Reverse mortgages can be paid in part or in full anytime. Your parents or loved ones can pay the loan off early with no prepayment penalty.
• Stay in a beloved community - A reverse mortgage allows your parents and loved ones to stay in their community without worrying about how to afford house payments. Reverse mortgages can be used to pay off an existing mortgage, provide additional cash for living expenses, or even pay property taxes.
• Financial independence - With a reverse mortgage, seniors can preserve what they worked so hard to purchase and maintain. With the funds received from a reverse mortgage, your parents can relieve the worry of living on a fixed income, take their dream vacation, or pay for medical expenses. There are no restrictions on what the money can be used for and there is nothing due or payable until they pass away or move out of the home.
• A new home - Some reverse mortgages have a purchase option which allows the homeowner to purchase a new home with no mortgage payments as long as they live there. Your loved ones would be able to move to a smaller, more comfortable, or newer home, or relocate to be near family. The choice is theirs and a reverse mortgage makes it possible.
• Tax-free money - While we suggest you contact a tax professional, typically proceeds from a reverse mortgage are not subject to taxes because they are not considered income.
• Social Security, Medicare and Medicaid benefits - Social Security and Medicare benefits will not be affected because those benefits are not based on the assets of the recipient. Beneficiaries of the Supplemental Security income program must keep their liquid assets under a certain limit. If loan advances are not spent in the month they are received, they will be considered liquid resources and may adversely affect eligibility for SSI. State-administered programs such as Medicaid, Aid for Dependent Children (AFDC) and food stamps have varying regulations. Plaza Residential Mortgage suggests all benefit recipients consult a benefits specialist at a local Agency on Aging office or local offices for these programs to determine how reverse mortgage funds may affect your personal situation.