Reverse Mortgage: Aging in Place

When it comes to older adults deciding where they want to live during their retirement years, it’s no surprise they want to stay in their homes and age in place. Traditionally, getting older meant moving from the home where you raised your family and downsizing into a smaller house in a warmer climate.  However, for most older adults, that simply isn’t the case.

In a recent survey, data shows that 77% percent of adults 50 and older want to remain in their homes for the long term — a number that has been consistent for more than a decade.¹  By staying in their home, seniors can remain in a comfortable and familiar place while being close to family and friends. If you are planning to age in place, your home equity may be able to help you find the financial stability you need.

A Solution to Afford Aging in Place

A Home Equity Conversion loan (HECM) or reverse mortgage, can be a useful tool for those seeking ways to age in place.  Older adults who have owned their homes for many years and, with increased home prices², may have substantial equity in their homes.  Borrowers can use the funds to make home improvements/modifications, help supplement their income, and support long-term financial goals.

Accessing your home equity can help you:

• Eliminate your monthly mortgage payment³
• Pay for in-home medical care
• Make improvements and repairs to your home
• Stretch your retirement savings

A reverse mortgage loan allows qualified homeowners, who are 62 or older, access to a portion of their home’s equity as cash. Borrowers do not have to repay the loan as long as they continue to live in the home as their primary residence, pay property taxes and insurance, and maintain the property according to the Federal Housing Administration (FHA) requirements.⁴ Funds can be used to cover daily expenses, medical bills, or even long-term care.

Borrowers can select to receive their funds³ in flexible disbursement options that can be used immediately:

• A line of credit that will grow over time⁵and be accessed on an as-needed basis
• A lump-sum of cash at closing (only available on fixed-rate loans)
• Tenure – monthly payments for the life of the loan
• Term – monthly payments for a specific number of years

If you’re interested in aging in place, call 1-800-976-6211 to speak with a licensed loan officer to see if a reverse mortgage is right for you.

Disclosures:

¹ https://www.aarp.org/home-family/your-home/info-2021/home-and-community-preferences-survey.html

² https://www.cnbc.com/2021/11/10/home-prices-are-now-rising-much-faster-than-incomes-studies-show.html

³ Your current mortgage(s) and any other existing liens against the property must be paid off at or before closing. You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

⁴ You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.

⁵ The reverse mortgage loan balance grows at the same rate as the available line of credit. Line of credit growth occurs and is only a benefit when a portion of the line of credit is not used. The unused line of credit grows over time and more funds become available during the life of the loan.