Make sure that you keep your benefits. If you are receiving government assistance, find out if a reverse mortgage will affect your benefits.
A reverse mortgage is an agreement that allows older homeowners, those 62 years of age or older, to turn part of their home equity into a source of monthly income without having to inconvenience other benefits by selling their home, refinancing their mortgage, or increasing their payments in any way. It is a great program that many who are aware of it take advantage of. It is named a reverse mortgage simply because of the fact that the payments are made to the homeowner instead of the homeowner making the payments themselves; the mortgage is therefore “reversed”.
Government Assistance
Government Assistance refers to Social Security and Medicare benefits. If the amount of total monthly assets exceeds $2000 for an individual or $3000 for a couple, they then become ineligible for Medicaid and their Medicare benefits are then taken away. The total monthly assets include anything that may be in a bank account or if there are any bonds or certificate of deposits, commonly referred to as a CD; all of this is considered liquid resources and can be put against you when it comes to government assistance.
Government Assistance with a Reverse Mortgage
A common concern with those who are either already involved in a reverse mortgage or those looking into receiving a reverse mortgage is whether or not it will go against the government assistance they are already receiving. If the money a person receives from their reverse mortgage is used immediately within the same month, it cannot be considered an asset and therefore will not impact their Medicaid benefits. If, however, the money a person receives from their reverse mortgage is in their bank account, then it will be counted as an asset and will then go against their benefits and possible make them ineligible for Medicaid if that amount has gone over the monthly maximum.
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