If your loved one has equity in their home, they can probably qualify for a reverse mortgage, also called a Home Equity Conversion Mortgage (HECM). Reverse mortgages are seen as a last resort in many cases, because of the many costs associated with them. They are a great option for seniors that own their homes, but alternatively have no significant sources of income. According to an article by AARP, as of October 2nd 2017, The United States Department of Housing and Urban Development (HUD) is implementing stricter rules for acquiring a reverse mortgage. With a reverse mortgage, you can exchange the value of your home for payments from lenders at no monthly cost. These funds can in turn be used to pay for home care services.
To qualify for a reverse mortgage, the borrower must:
Minimum age of 62
Primary residence only
Meet financial guidelines (income and credit history requirements)
Maintain the value of the home
Pay taxes and homeowners insurance
How you can receive funds of a reverse mortgage:
Draw funds as needed
A combination of all three
A frequently question that comes across everyone’s mind is, “What happens to the reverse mortgage if your loved one chooses to leave the house, or passes away?”. Ultimately, the heirs have one year to decide whether or not they want to keep the home but they do not inherit the debt of the loan because it is insured through the FHA (Federal Housing Administration) or they could sell the property. Reverse mortgages are very accommodating and flexible.
If you are overwhelmed by the process of finding affordable in-home care services, or if you want more information about how to obtain a reverse mortgage - contact us today at Senior Helpers.
Senior Helpers – Sacramento/Placer provides compassionate caregivers to help our local seniors with day-to-day tasks such as housekeeping, meal prep/planning, and transportation as well as providing assistance with bathing, dressing, medication reminders and more. Our mission is to improve the life of seniors and help relieve the burden on their families. If your loved one lives in Sacramento or the surrounding areas (Roseville/Rocklin, Folsom, Rancho Cordova, Elk Grove) and you would like more information, please call us at 916-671-5777 or click the Contact Us link at the top of this page.