Mich & Elaine - yes those are important & you are both spot-on on issues. Mich - real estate in FL, well i bet you have quite the sense of humor!! LOL! it's Medicaid that pays for LTC for elders who are below their state's asset limit.
Why a mortgage makes no sense, imho. Now if the ? is all about doing a reverse mortgage because mom needs $ to stay in the house and get home health care then a RM could be used for that. But all this is sticky & best suited to having an elder care planning attorney to deal with. RM, imho, work for people who are still "young" old, like in their 60'/70's who are in good health and reasonable expectation of living in the home for decades. At 88 that is not likely. With the 2 big players in the RM market (Bank of America & wellsFargo) getting out of doing them this year, RM's are harder to get and stricter on compliance on the terms of agreement, which almost all require the homeowner to live in, maintain all repairs, pay all taxes, insurance, etc. So if mom moves out of the house and into a NH, then the RM could come due in full. Not good. I looked into a RM for my mom, not feasible for a # of reasons mainly age - her age and the age of the home.
It's just amazing to me the # of people who truly think that the "govmint" is going to pay for mom's or gran's care and they can do whatever with mom's or gran's assets without it being a problem. Everything is out there to be Xchecked, it may not be today but eventually. Almost every week, there is another Katrina fraud case in our papers (we live on the Gulf Coast) and most of these are kinda small amounts and that was 2005. Medicaid can do the same and as the states face budget issues will be doing so and increase the % of MERP (estate recovery).
I've done Medicaid for my mom and helped my DH with his mom's (twice for 2 different states) and found that the Medicaid application is being scrutinized. For my mom, her application with supporting documents was about 100 pages(I turned everything in all at 1 time - which seems to be the best way to do anything federal).
Also Medicaid approval is BOTH financial and medical necessity. My mom, who is mid 90's and with Lewy Body Dementia, was denied on medical necessity as when her initial intake was done, she only had 1 Rx (this was this year - 2011). Now the Rx's she refused to take -which are very much part of the reasons why she is in a NH plus the LBD hallucinations & paranoia - were left off the list so she had in theory no real medical necessity, then she needed another chronic condition, so 1 cardiology visit later, got heart condition added to her medical necessity. Got Medicaid medical necessity cleared up and it took 2 appeals - which for medical is done by the NH but with the family helping with. But my point is Medicaid approval isn't just automatic.
There IS a five year lookback for Medicaid, and they want detailed, very detailed descriptions and proof of what the person's money was spent on - and it had to be spent on the person themself, and for their care - nothing out of the ordinary day to day expenses or it will raise the red flag and make the person unqualified!
Just playing devil's advocate...... If you were able to get a mortgage on your mother's house and you spent the money on yourself, I think you could put your mother in a position of not qualifying for sponsored nursing care if and when she needs it.
Being involved in real estate, I have seen where people want to mortgage their parent's home to raise cash with the plan that parent will go to medicare or medicaid (I can never remember which one) sponsored nursing care, but they get to keep the cash (or have already spent the cash) and let the home go into foreclosure when the parent can no longer stay there. I believe there's a five year look-back period that will put the kabosh on that plan..... Just sayin' ......
I agree with igloo572 above - why would you want a mortgage for an 88 year old. Need more info from you - vlekje - before anyone can answer that question.
Is this ? about getting a "reverse mortgage"? Is the house paid for? Do you have Durable POA, regular POA or perhaps even a "springing" POA? Why would you want to get a mortgage and the long-term debt from it for someone who is 88? Don't mean to be snarky, but more info helps put the ? into the situation that you find your mom in so others can share their experience.
Mich - real estate in FL, well i bet you have quite the sense of humor!! LOL! it's Medicaid that pays for LTC for elders who are below their state's asset limit.
Why a mortgage makes no sense, imho. Now if the ? is all about doing a reverse mortgage because mom needs $ to stay in the house and get home health care then a RM could be used for that. But all this is sticky & best suited to having an elder care planning attorney to deal with. RM, imho, work for people who are still "young" old, like in their 60'/70's who are in good health and reasonable expectation of living in the home for decades. At 88 that is not likely. With the 2 big players in the RM market (Bank of America & wellsFargo) getting out of doing them this year, RM's are harder to get and stricter on compliance on the terms of agreement, which almost all require the homeowner to live in, maintain all repairs, pay all taxes, insurance, etc. So if mom moves out of the house and into a NH, then the RM could come due in full. Not good. I looked into a RM for my mom, not feasible for a # of reasons mainly age - her age and the age of the home.
It's just amazing to me the # of people who truly think that the "govmint" is going to pay for mom's or gran's care and they can do whatever with mom's or gran's assets without it being a problem. Everything is out there to be Xchecked, it may not be today but eventually. Almost every week, there is another Katrina fraud case in our papers (we live on the Gulf Coast) and most of these are kinda small amounts and that was 2005. Medicaid can do the same and as the states face budget issues will be doing so and increase the % of MERP (estate recovery).
I've done Medicaid for my mom and helped my DH with his mom's (twice for 2 different states) and found that the Medicaid application is being scrutinized. For my mom, her application with supporting documents was about 100 pages(I turned everything in all at 1 time - which seems to be the best way to do anything federal).
Also Medicaid approval is BOTH financial and medical necessity. My mom, who is mid 90's and with Lewy Body Dementia, was denied on medical necessity as when her initial intake was done, she only had 1 Rx (this was this year - 2011). Now the Rx's she refused to take -which are very much part of the reasons why she is in a NH plus the LBD hallucinations & paranoia - were left off the list so she had in theory no real medical necessity, then she needed another chronic condition, so 1 cardiology visit later, got heart condition added to her medical necessity. Got Medicaid medical necessity cleared up and it took 2 appeals - which for medical is done by the NH but with the family helping with. But my point is Medicaid approval isn't just automatic.
Being involved in real estate, I have seen where people want to mortgage their parent's home to raise cash with the plan that parent will go to medicare or medicaid (I can never remember which one) sponsored nursing care, but they get to keep the cash (or have already spent the cash) and let the home go into foreclosure when the parent can no longer stay there. I believe there's a five year look-back period that will put the kabosh on that plan..... Just sayin' ......
Is the house paid for?
Do you have Durable POA, regular POA or perhaps even a "springing" POA?
Why would you want to get a mortgage and the long-term debt from it for someone who is 88? Don't mean to be snarky, but more info helps put the ? into the situation that you find your mom in so others can share their experience.