Expert: Dick Dennis - 9/28/2005

Question
Thanks for the reply regarding my parents estate.
My parents are 76 and 77.
The price of the sale of the house would aprx ,190,00. Fair Market value.
The expenses they pay would would be just electric household etc.
Wouldn't that sum of money  from the sale of the house be wise now for investments?
What do u mean by a reverse mortgage snd how does that benefit them..They live healthy now and really don't need extra income.
Should church pay a living stipend and why..Thanks again for your help...Cindy

Answer
If your parents don't need additional income, then dismiss the idea of reverse mortgages. Information: Reverse mortgage is insured by FHA. They approximate how much they would pay the owners of the property based on their age (the youngest one of the two). The owner may get one lump sum, montly income for the rest of their lives, or a combination of the two. It is a mortgage and the only time it gets paid off is when the last parent passes. The heirs then sell the house and the mortgage gets paid off, even if the amount paid to the parents far exceeds the value of the house at the time of their demise.

If you say your parents house is worth $190,000, then figure your parents would live to, say, 88. That means the church would pay all taxes and other costs until they go. But if your parents already own their house free and clear, why in heaven's name would they be interested in giving the house to the church? They already don't pay anything, except taxes and insurance.

But if the church expected to buy their house at a discount price, say, $130,000, then the difference between that figure and the $190,000 is $60,000. So in approximately 12 years the church would be paying the taxes and insurance.
60,000 divided by 12 is 5,000. Will the taxes and insurance amount to $5,000 per year? If so, then it is a good deal.

If, however, your parents belong to that church and want to be benevolent with their donations, then that is something else. That is something only they can answer.

I hope this helps you a little further.

Dick Dennis      dixiedee13@aol.com