Disadvantage with reverse mortgage: Cannot be in a Living Trust and goes through probate upon death. Heirs have 12 months to payoff/ refinance/ sell or ask for 12 more for total 24 months to execute their plans.
Probate is not something I wish upon anyone. Cost, time, loss of control.
If Mom has no heirs or heirs have great income she can live in the house and get in home care (cost maybe $6000- 8000 in California but can she stay in place until she dies, does family want this?) Mom only pays taxes, insurance, HOA...
Or refinance conventional depending on her income and use for temporary money and rent the house to supplement. She then moves to care facility?
How old is she? How advanced is dementia? Could she actually sign with a notary and be considered able to know who is the President and what day it is? Family is close by? Can she live with a family member? How many heirs and do they agree on same plan?
Suggestions: Make sure house is vested in Living Trust, she has her care wishes in writing, get the valuables out of the house, one way to spread out the tax over the $250000 gain plus improvements is to sell the someone who is already preapproved for a loan (not someone who can't get a loan) offer them 6% or 7 % rate with penalties to prepay first three years to avoid the lump sum. Take a 25% down payment then spread the taxes over 5-7 years until they sell or refinance.
