Robert and Sally purchased a home 25 years ago, have since paid off their mortgage, and benefited from the appreciation on the property.
Today, the house is valued at $1,200,000, so they contacted their mortgage broker and set up a tax-free Reverse Mortgage. The Reverse Mortgage allowed them to gift 200K to their son Daniel without them having to make any monthly mortgage payments. Daniel was able to use that 200K to put a downpayment on a new home and qualify for his own conventional mortgage.
Robert and Sally essentially provided an early inheritance without affecting their own finances in any way.
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