You might have seen the ads on TV about reverse mortgages, but what is a reverse mortgage? It is a loan for older homeowners that uses a portion of the home’s equity as collateral. Instead of the homeowner paying the lender, it is the lender that pays the homeowner based on the equity in the home. How much can be borrowed? The amount that can be borrowed in a reverse mortgage is determined by an Federal Housing Authority (FHA formula). The formula considers age, the current interest rate, and the appraised value of the home. What are the requirements for a reverse mortgage? You must be at least age 62 The home must be owned free and clear or all existing liens. Any mortgage balance must be paid off with the proceeds of the reverse mortgage loan at the closing. There are usually no income or credit score requirements. How is the loan repaid? The loan cannot become due as long as at least one homeowner lives in the home as their primary residence and maintains the home in accordance with FHA requirements (keeping taxes and insurance current). The must be repaid when the last surviving homeowner permanently moves out of the property or passes away. The estate will have approximately 6 months to repay the balance of the reverse mortgage or sell the home to pay off the balance. ]]>
Easing Housing Transitions for Seniors
There comes a time when families start to think about senior members moving. Factors such as retirement, finances, lifestyle, health or the distance between family members are just a few of the reasons why seniors may decide to relocate. Moving is a big decision especially when a senior has lived in one place for a very long time. Many things must be considered, including access to health care, recreation, social activities and practical concerns, such as grocery stores, libraries, climate, etc. Access to Quality Care For many seniors access to health care or options for health care assistance is the primary reason for moving. When considering options it is important look at the short-term solutions, but also consider long term scenarios. Options may include drop-in help, moving closer to a family member that can assist when needed or retirement communities that offer fully independent living to supportive assistance as required. Community Services It is also important to research the area community services. You will want to make note of services such as homecare, cleaning services, snow removal, transportation and home repair. Some individuals may want access to volunteer organizations or senior centers where they can be involved in the community. Support As an older adult, moving is an especially difficult transition. Finding the support the senior needs in the new community is imperative. Groups that seniors can connect with will help the transition go smoother. Connect with church groups, home visit solutions or perhaps meetings that would be conducted in a home setting. Here are some websites that may help you in your transition: •Eldercare Locator •AARP •Elder Web: Online Eldercare Sourcebook •American Society on Aging (ASA) •Senior Resource Housing: Information on Housing Options]]>