End of life finance
I’m looking at financing for my mother’s final days. It could be a month it could be 6 months I would say Max 5 years.. She has total equity in her home.. On the low side I will say 190,000. The way the market is it may even be 230,000.
She She needs care and with the help of the family we are getting it done.. However the money will run out. What type of loan can I use on the house, a remortgage, a reverse mortgage, or a home equity loan. I’ve been listening on the radio as I do everyday driving home but never hear this topic discussed.
Im leaning Towards reverse mortgage because I believe there’s no payments to be made until the property is obsolved.
Thank you so much Terry you are wise beyond your years.
Terry Says
Well, i do have a lot of years!! But you are barking up the wrong tree in trying to finance your mother’s care.
First, she can’t get a reverse mortgage because she must be living in the home and have enough income to demonstrate she can pay the taxes, insurance and upkeep. Given the outlook it doesn’t make sense to even try, and/or to pay the fees on a RM if she is accepted.
You could sell the home, and none of the gain would be subject to taxes if it is sold while it is her principal residence. Under current tax law there is a $250,000 gains exclusion on the sale of a residence. But that might mean moving her before she is quite ready to move.
I would suggest your family wait it out — perhaps contribute some money for her in-home care — and then expect to get reimbursed from the sale proceeds when shemoves out or passes on.
Meanwhile, make sure her will is up to date, and that she has a living will (pull the plug document) as well as a healthcare power of attorney. And that one of you has financial power of attorney so you can sell them home without going to court in case she becomes incapacitated (stroke, or something else).
And tell your siblings that this is the reason people buy Long Term Care Insurance! Search for columns on my website.
