Phil Cannella Teaches How to Use a Reverse Mortgage to Purchase a Long Term Care Policy
Phil Cannella advises many of his clients to take out a reverse mortgage for assisted living expenses, and they often worry that doing so will leave nothing to pass on to their heirs. What Phil Cannella points out, however, is that your home may be your best financial asset, and it will continue to appreciate in value. The odds are favorable that by the time you pass away, the equity you pulled out will be recuperated.
Let’s look at an example and say that you have paid off a $300,000 house with $150,000 in equity and you decide to take out a reverse mortgage for $150,000. You use part of the money to pay for a nurse to come over twice a week to administer medication to your wife. Irony strikes and you pass away five years later, but your wife goes strong for another 15 years, using the $150,000 line of credit for 20 years. There were no repayments, no taxes and your wife got to live in your home until her final breath. 20 years later, your house will have appreciated considerably, equity would have built up again and could then be used to repay the mortgage company.
Instead of cheating your heirs of an inheritance, Phil Cannella urges you that a reverse mortgage actually allows you to address long term care issues that might otherwise burden them and helps you protect the very assets that you’ll be passing down.
Phil Cannella sees too many retirees who have only a conservative IRA at best or perhaps only a joint account with their spouse with barely enough in it to get by, yet they have paid off their mortgage and are living in a gold mine. They’re in a cash crunch and are struggling because they have no cash flow. Reverse mortgages are an immensely powerful tool that provides newfound hope and a way to tap into their hidden wealth.