Aging in Place: A Reverse Mortgage Can Help

By Percy Ihara
Wednesday - October 24, 2007

Our homes become increasingly important to us as we advance in age. A home is a place with family ties and memories, a place to grow old in. Many seniors are unaware of the benefits of a reverse mortgage and how it can help them stay in their homes to age in place.

What is aging in place? Aging in place is the ability to continue residing in the current housing setting, either at home or in a nonhealthcare environment, and using products and services to allow and/or enhance the ability to stay and age without having to move as circumstances change.

Many seniors are faced with the frustration of a low or fixed income, but desire to remain in their home. According to the United States Census Bureau, the median household income in 2005 for those aged 65 and above was estimated at $24,509. Low income levels make it difficult to pay for supportive services and home modification that could enhance aging in place. In addition, a recent study by the National Council on Aging shows that many older Americans, including those with serious health problems needing long-term care, want to live at home rather than in a care facility.


A reverse mortgage has the potential to dramatically increase the ability of senior homeowners to pay for long-term care while aging in place. The National Council on Aging reports that 9.8 million households with residents aged 62 and older are dealing with an impairment that can make aging in place difficult. These households could access as much as $695 billion of home equity through a reverse mortgage to help pay for care-giving and other long-term care expenses.

A reverse mortgage can be the financial solution for these seniors to stay in their homes and convert the equity built up in their homes into tax free* income. Among the most popular uses of reverse mortgage proceeds are long-term care and home improvement. Seniors are thankful to stay in their homes, and safely age in place while being able to enhance their surroundings. The proceeds of a reverse mortgage can also be used to pay for medical bills or prescriptions, existing debt, a grandchild’s education, or simply to seek peace of mind by having extra cash. The funds from the reverse mortgage may be received as a lump sum, monthly income, line of credit, or any combination of these options.

With a reverse mortgage, borrowers retain the title to their homes and are free of required monthly mortgage payments. Providing that real estate property tax and insurance payments are made, and the home is maintained in reasonable condition, borrowers will never, under any circumstances resulting from obtaining a reverse mortgage, be forced to leave their homes. Conveniently, with a reverse mortgage the loan becomes due when the borrower sells the home or permanently moves out. The balance owed on the loan can never exceed the value of the home, at the time of repayment.


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