Menu Close

Gift with Purpose: Using a Reverse Mortgage to Help Your Loved Ones

The desire to help children or grandchildren with major life expenses is a common sentiment among seniors. A reverse mortgage can unlock the equity in your home, allowing you to provide a significant gift to your family members while ensuring your own needs are met.

Gift with Purpose Using a Reverse Mortgage to Help Your Loved Ones

How Reverse Mortgages Facilitate Gifting

Here’s how you can use funds from a reverse mortgage to support your family:

  • Lump Sum Gift: Provide a substantial one-time gift to help with a down payment on a home, college tuition, business funding, or other significant expenses.
  • Ongoing Support: Offer regular payments from your reverse mortgage as supplemental income for living expenses or bills.
  • Advance on Inheritance: Essentially give your heirs an early portion of their future inheritance.
  • Debt Consolidation: Gift money to your children to help them pay off high-interest credit card or student loan debt.

Potential Tax Considerations

Gifting money from a reverse mortgage can have financial implications:

  • Gift Tax Exemptions: Learn about the annual and lifetime exclusions for gifts without tax liabilities.
  • Income for Recipients: Depending on the gift amount, your family members may need to report it as income on their tax returns.
  • Seek Expert Advice: Consult with both a tax advisor and a reverse mortgage specialist to fully understand how gifting will impact you and your recipients.

Case Study: The Martins Support Their Daughter’s Family

The Martins wanted to help their daughter’s family buy their first home. A reverse mortgage enabled them to make a generous gift towards a down payment, fulfilling their wish without sacrificing their own retirement security.

Protecting Your Future While Gifting

Before gifting, remember to prioritize your own well-being:

  • Preserve Your Financial Security: Gift only an amount that won’t jeopardize your ability to cover your living expenses, healthcare needs, and long-term care.
  • Leave an Inheritance: Ensure you retain enough equity to leave something to your heirs as planned.
  • Understand Long-Term Implications: Account for the fact that any money gifted reduces the amount that can be accessed in the future.

How Much Home Equity Do You Have Available?
Try Our Reverse Mortgage Calculator, FREE!


    Gifting Strategically and Responsibly

    Gifting money to loved ones can be an incredibly meaningful act, but it should be approached thoughtfully.

    Get the support you need from the experts at Reverse Mortgage Answers! Call us at (800) 420-5515 or contact us at Download our free guide at or use our free calculator to see how much you could qualify for:

    Leave a Reply

    Your email address will not be published. Required fields are marked *