On behalf of a family where the mother (89 years old) is suffering from dementia due to Alzheimer’s disease, we obtained an adjustable-rate Home Equity Conversion Mortgage (HECM) — also known as a reverse mortgage — on the mother’s home in Broward County, Florida. One of the challenges was satisfying all the legal hurdles associated with the mother’s mental state, but we were able to obtain the loan with the daughter acting as the power-of-attorney.
There was no existing mortgage on the home to pay off, so the family will be able to use all the loan proceeds to pay for the mother’s 24-hour, in-home care, and other health care expenses.
In addition to the initial cash draw at the closing, the family will also be able to draw from a line of credit. The initial interest rate is in the low 4’s, and will adjust on an annual basis thereafter. One of the benefits of reverse mortgages is that no monthly mortgage payments are required, as the loan balance does not come due until the borrower moves out of the home, passes away, fails to pay taxes or insurance, or neglects to maintain the home.
