The majority of older Americans want to stay in their homes as they age, and with 80% of adults 65 and older owning a home, a reverse mortgage is something they may want to consider, according to a recent advisory, Pointers to Help Seniors Live at Home Longer, from the American Bankers Association Foundation (ABA).
“Older Americans make up the largest share of homeowners in the country,” said Corey Carlisle, executive director of the ABA Foundation. “In order for them to stay in their homes as they age, families and caregivers must plan ahead to ensure the elderly have all the resources they need to be safe, independent and financially secure.”
Reverse mortgages are certainly not for everyone, but can be a wonderful option for the right person. Homeowners over 62 should carefully consider a reverse mortgage as an option, according to the list of tips in the advisory to help seniors live at home longer.
First though, they should take a hard look at their financial situation as a whole to determine if a reverse mortgage would be of use to them or if they even have enough equity in their home to make it worth their while, the advisory says.
The next step is to consider a reverse mortgage, which includes some general tips that a homeowner should think about when applying.
Shopping around for the right lender is vital to success when starting the reverse mortgage process. Another tip the ABA gives is to read all of the loan documents carefully. As many people in the industry know, the lack of education is where a lot of confusion can come up when consumers are learning about the reverse mortgage product.
Focusing on which actions cause the loan to become due and payable is an extremely important component of that education, because in the past, this was where people were not as informed as they could have been and lost their homes because they were unable to pay the loan back.
Modifications in the home are also something to evaluate upon preparing to age in place. Determining which modifications are necessary is the third pointer the ABA gives. The upside to this is that if someone gets a reverse mortgage, they can use the loan proceeds to fund these modifications.
Some of the modifications to assess include: step-free entrances to the home, upgrade lighting inside and outside of the home, modify the flooring in the home to prevent tripping, install elevator or chairlift if the home is two stories and install grab bars in the bathtub, shower and near toilet.
A reverse mortgage can make aging in place a whole lot easier and less stressful just as long as the borrower knows exactly what he or she is getting into.
See the other tips from the American Bankers Association
Written by Alana Stramowski