CAMERON & MITTLEMAN LLP
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OUR ESTATE PLANNING ATTORNEYS
You may hear some people talking about a reverse mortgage to support themselves. It can seem like a quick and simple way to cash in on your home's equity while supporting yourself into the future.
Here's what you should know about how a reverse mortgage could impact your estate plan.
Reverse mortgages are not for everyone. A reverse mortgage is limited to those over 62 years old.
With a traditional mortgage, you make monthly payments to lower the balance you owe on your home. A reverse mortgage effectively eliminates your monthly payment, but your total mortgage balance increases instead of a decreasing.
Including your house in your estate plan can be challenging when you have a reverse mortgage. With a traditional mortgage, the person inheriting your home may need to continue the payments, but it would be a smaller overall burden. Since the balance on a reverse mortgage grows, someone inheriting your house could end up assuming a significant amount of debt.
As your loved ones are settling your affairs, they will have a few options for what they can do with a house with a reverse mortgage, such as: