How Does a Reverse Mortgage Impact Your Estate Planning?
A common question we hear is how a CHIP Reverse Mortgage affects estate planning and inheritance. If you're considering this option, it's essential to understand the long-term impact on your assets and family.
Let’s break down what you need to know to protect your legacy while enjoying your retirement.
How a Reverse Mortgage Works
With a CHIP Reverse Mortgage, you receive tax-free funds without selling your home. You continue living in your home, and the loan is repaid only when the property is sold or you move out. However, since interest accrues over time, it can reduce the remaining equity in your home.
What Happens to Your Home After You Pass?
When the borrower passes away, their estate typically has six months to settle the loan. This can involve:
Selling the home to repay the mortgage balance
Using other assets to pay off the loan and keep the property within the family
Strategies to Protect Your Estate
Cap Your Withdrawals: Limit how much equity you borrow to preserve more of your home’s value.
Regular Updates: Work with your mortgage advisor and estate planner to adjust your plan as needed.
Open Communication: Discuss your financial plans with your heirs so they understand your goals and options.
Peace of Mind Through Planning
With the right strategy, a CHIP Reverse Mortgage can support your retirement lifestyle without compromising your family’s inheritance. Our experienced advisors can help you plan effectively, ensuring your assets are protected.
