The cost of long-term care (LTC) in the United States could be an extremely difficult one for American seniors on fixed incomes to absorb, but there are potential solutions to the cost equation. One potential solution is a reverse mortgage.
This is according to a new column at Forbes which breaks down LTC costs and how different programs and products could be used to help cover those costs.
“With a reverse mortgage, a person borrows against the equity in their home,” the column reads. “The most common type of reverse mortgage is a Home Equity Conversion Mortgage (HECM). These mortgages are available only to homeowners who are at least 62 years old.”
Reverse mortgages are presented alongside other potential solutions including Medicaid benefits and programs which are specifically designed for veterans of the United States Military.
“Fortunately, options beyond insurance can provide financial help when it comes to paying for assisted living,” the column says of these options. “However, these programs require applicants to meet specific criteria in order to qualify.”
Readers are advised to compare the qualification requirements for each potential solution. With a reverse mortgage, the home must remain the borrower’s primary residence, while also keeping up with necessary maintenance and associated taxes and homeowner’s insurance. The amount of available equity that can be converted into loan proceeds must also be sufficient to cover the financial needs of the borrower.
For Medicaid, the recipient must live in the state where they’re applying for benefits; reside in an assisted living facility that’s licensed for the Medicaid program; and must meet certain financial need requirements, according to the column. Veteran’s benefits are also restricted to those who are confined only to their bed; are an existing resident of a long-term care facility; and have severe vision impairment among other potential requirements.
Read the column at Forbes.