When it comes to retirement and where you will be living in your golden years, many retirees want the option of being able to stay in their current home, also known as aging in place. However, you may find some features in your home may become problematic as you get older. If you are planning to age-in-place, knowing what modifications to make is just as important as knowing how you will pay for them.
What Updates Should be Made?
Two common rooms of the home that are frequently modified for senior living are kitchens and bathrooms. Bathroom updates usually involve minimizing potential hazards by installing zero-threshold showers, adding seats to existing bathtubs or showers, installing grab bars by the shower and toilet, modifying to comfort-height toilets, or even a layout or location change. Common kitchen updates consist of easy to reach storage, easy-to-grab handles and knobs, lower working surfaces, seated work areas, and space widening or location changes.
The costs for these types of projects can vary. Therefore, to ensure the home is safe and accessible, a combination of several upgrades may be necessary. When added up, these modifications can be quite expensive leaving the question: “I want to age in place, but how can I afford these changes?” 
Using Home Equity to Age in Place
If you are planning to stay in your current home, it’s likely that the equity you have built may help you accomplish that goal. A Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage loan, allows homeowners who are 62 or older, access to a portion of their home’s equity as cash. You do not have to repay the loan as long as you continue to live in the home as your primary residence, pay property taxes and insurance, and maintain the property according to the Federal Housing Administration (FHA) requirements.1 You can use the funds you receive any way you like, such as remodeling or making modifications to your home.
Borrowers who have an existing reverse mortgage may find that refinancing can also help them accomplish some of these modifications. With rising home values and the increased Max Claim Amount (MCA) for HECMs in 2021, it may be the right time to consider refinancing your reverse mortgage.
Reasons to Refinance:
- The Maximum Claim Amount (MCA) for 2021 increased to $822,375, which may allow borrowers to access more funds.
- Interest rates may be lower than the interest rate on your current mortgage.
- Your property value may have increased since you closed on your loan and by refinancing, you may be able to take more money out.
If you are interested in learning how a reverse mortgage may be able to help with aging in place, call 1-800-976-6211 and speak with a licensed loan advisor for more information.
Disclosures:
1 As required by the Federal Housing Administration (FHA), you will be charged an initial mortgage insurance premium (MIP) at closing and, over the life of the loan, you will be charged an annual MIP based on the loan balance.
2 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.