Reverse Mortgages in West Michigan

Sometimes things aren't as they seem.....

A recent article in the Davis County Clipper sets out to discount the benefits of reverse mortgages.  It's not unique. In fact, it contains many of the usual discouraging comments.

The difference?

This time the author ran into an individual with comprehensive knowledge of reverse mortgage benefits.

Read the article for the usual ill informed remarks on reverse mortgages. Then read Robert Canon's comments.

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Reverse mortgages aren't for everyone. But, maybe one can solve your problems? 

As always, tax implications of reverse mortgages are best discussed with your own tax adviser.  Call toll free - 877-308 - for a discussion of the pros and cons of a reverse mortgage in your own situation.
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Barbara Quirk is a columnist for the "Capital Times" over in Madison Wisconsin.

Yesterday she wrote about a 90 year old woman in Akron, Ohio who shot herself before she could be removed from her foreclosed home.

The woman was facing a problem all to common to seniors living on a fixed income:  not enough money!

Quirk quotes from a study conducted by the Urban Institute:

 "How much could reverse mortgages contribute to retirement incomes?" The study concludes that retirees who want to stay in their homes can tap into home equity through a reverse annuity mortgage (RAM), which will pay them a tax-free monthly amount. This method can provide a significant boost in retirement income, particularly for low-income homeowners with significant equity. However, recent declines in home prices raise uncertainties about the potential for using a RAM as a retirement income booster.

What should homeowners watch out for when relying on retirement income through RAMs? This study suggests that for many older adults, home equity represents their single largest financial asset. Traditionally, older adults have not tapped into their home equity unless some adverse event, such as the death of a spouse, forces a sale. With the loss of retirement savings, more retirees may be increasingly tempted to turn to their home to help make ends meet.

She concludes by reminding her readers how important it is to get the facts about a reverse mortgage from a legitimate specialist before making any decision.

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For free, no obligation information on West Michigan reverse mortgages, call toll free (in Michigan): 877-308-1489.

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Do I receive a tax duduction on my reverse mortgage interest?

The June 24th issue of the Everett WA Herald has a clearcut explanation of both taxation of reverse mortgages and when interest paid on them can be deducted.

Here are a couple of key concepts from the article.

When you take out a reverse mortgage you receive a sum of money from the bank.

Since the bank requires no payments until the last borrower no longer inhabits the house, the debt grows larger each year.

The unpaid interest is added to the loan balance each month.

Eventually the loan is paid off when the home is sold - usually after owner's death.

Loan proceeds are not taxable income because  the money must be paid back.  (If you choose to sell your home after taking out a reverse mortgage,  you must repay the outstanding balance, and of course  you  keep any proceeds that remain.)

As long as  your profit on  the  sale was $250,000 or less - $500,000 for a married couple - all sale profits would be tax free.

Here's another difference in tax consequences: because no interest is actually paid on the mortgage until the home is sold, the interest deduction can not be claimed until that time.

Suppose for example that you decided to sell your house after accumulating $40,00 worth of unpaid interest. In that case, you could claim the $40,000 mortgage interest tax deduction for the tax year in which the home was sold.

I thought this newspaper article provided a pretty clear explanation of these points, but remember - anytime you are talking tax implications it's always a good idea to consult with an experienced tax advisor.

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Seniors, money from your home with NEVER a mortgage payment!
Please call with questions. MICHIGAN TOLL FREE: (877) 308-1489.
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Property Taxes Keep Rising

Here's a story  of two different Pennsylvania homeowners who looked into reverse mortgages.

What prompted their concern?

Rising property taxes!

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Homeowner over 62?  Get money from your home with NEVER a mortgage payment,  Ask me how. Michigan Toll Free: 877-308-1489.