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There may have come a time in your life when you suddenly turned around and found that your role in life has changed. One day you're walking down the street, minding your own business, and — boom! — your parents need you more than you need them. Okay, maybe it's a bit more gradual than that, but it can hit you rather unexpectedly just as you're sighing with the relief that your own children have left the nest.
As your parents decide to go through the major financial transaction of a reverse mortgage, they may need your support more than they may have ever needed it before. In fact, this may be the first time that you realize they need you at all. Just remember, if you need help, ask for it. The reverse mortgage originator and counselor are more than happy to talk to you one-on-one about the loan (although they may not be able to divulge private financial information without your parent's consent).
 | The names on the deed to your parents' house are your parents' signatures, not yours. It can be very tempting to step in and take over the finances for your parents — sometimes impossible to resist because your parents are people that you care very much about and you tell yourself that you're only butting in for their own good. The key words here, of course, are "butting in." Remember when you were a youngster and your parents would stick their noses into everything you did? Remember how deflating it felt to know that they didn't think you were capable of doing something on your own? Well, the tables have turned and your parents may feel the same way if you step in without their solicitation. |
Allowing your parents to make their own decisions at this critical juncture in their lives not only empowers them in a world that is so eager to make seniors out to be crazy old coots, it ensures that they get what they want . . . not what you want. All children, adult or otherwise, feel a sense of entitlement when it comes to their parents. In this case, you believe, as they once believed of themselves for you, that you know what's best for them. And maybe you do. Since seniors run the gamut of 62 to 102-plus, their degrees of comprehension and ability will vary greatly. Generally speaking, a 65-year-old is going to be much more aware and able than a 95-year-old. Of course, there are always exceptions so you have to be able to truly look at your parents objectively.
You may also feel a twinge of guilt about suggesting a reverse mortgage for your parents in the first place; if the windfall will benefit you, you won't have to worry about them financially (or at least not to such a great extent), nor will you be forced to inherit their home since the majority of people sell it to pay off the loan. On the other hand, you may feel selfish because you're trying to convince them not to get a reverse mortgage, since you're afraid it will affect your inheritance. These are both perfectly normal, common reactions. And as long as you keep your parents' needs and wishes in the forefront of your mind and your needs and wants way in the back, you should all come out on top. Try not to sway their decision too much, especially if your reasons are based on your own agenda. Of course, we know you would never confuse your motives.
 | Have you ever heard the saying, "prescription without diagnosis is malpractice"? It means that giving someone a solution before knowing what their problem is can only lead to bad results. Reverse mortgages are a wonderful way for some seniors to live out their lives in their homes, but it is not a panacea miracle pill. |
You also need to know your parents well enough to feel secure in letting them go off and get a reverse mortgage alone. Some seniors are just as sharp about finances as they were in their youth, and some were never sharp with finances and can't be expected to suddenly understand interest rates and falling equity. If you are looking into reverse mortgages for a single parent, try to remember back to who handled the finances as you were growing up. Was it this parent? If not, is this one completely in the dark, or does he or she have a pretty good grasp of his or her financial portfolio? It may seem like we're feeding into a stereotype, but many senior women were never in charge of the money and have been left without the tools to manage their own finances.
Take a moment to evaluate your parents by asking yourself the following yes-or-no questions. The more yes answers you have, the better equipped your parents are to handle a reverse mortgage without your constant (loving) help. If you don't know an answer, skip it but try to find out after speaking with your parents (with theses questions in mind), and then come back and evaluate them again. The following checklists give you a great way to objectively evaluate your parents:
• Do your parents currently pay their own bills?
• Do they keep a balanced checkbook?
• Are they able to remember where their money is (for example, savings accounts, investments, different banks, and so on)?
• Do you feel that your parents could be trusted with a very large sum of money?
• Are your parents able to keep track of their cash or does it seem to "disappear?
• Are your parents savvy about senior con artists?
- Reverse Mortgage Understanding:
• Do your parents understand the basics of a reverse mortgage?
• Was it easy to explain the rudiments of a reverse mortgage to them?
• Do they seem comfortable with the idea of reverse mortgages (not suspicious, scared, and so on)?
• Do they understand the cost of a reverse mortgage?
• Have they done a comparison of how much they need per month versus how much they can get with a reverse mortgage?
- Emotional and Mental Capabilities:
• Do your parents cope well with stress?
• Would you classify your parents as independent?
• Are your parents rational and free from (serious) mental lapses?
• Are they able to live on their own today?
• Will they be able to live in their home for the next few years (even with help)?
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