Downsizing, Organizing, Handicap Remodeling or Relocating
May 10, 2011
When Robert and Anne bought their family home thirty years ago, their plan was to live through retirement in this home. They had furnished their home with refurbished antiques acquired from their many trips together. It was one of their cherished antique coffee tables that Robert tripped over, breaking his hip. Now with his return from the hospital in a wheelchair, the overwhelming task of making their home accessible for Robert’s wheelchair and safe for both of them faced Anne.
Remodeling for wheelchair access, organizing home furnishings and daily living items or downsizing and relocating to a smaller living area are monumental tasks that are many times thrust on senior home owners. Sometimes the need to do this is brought on by injury or age related illness. Home and yard maintenance can become a daunting chore for even the healthiest of seniors, requiring them to make a downsizing decision.
There is a large and growing industry of specialists who understand these challenges of elderly homeowners and are ready and willing to help with remodeling, organizing or the sale of the home and with the move to a new location.
A professional organizer provides skills in making the home safe and manageable. Relocating furniture, removing hazards such as electrical cords, throw rugs, heavy objects on shelves that might fall are some of the ways they make a home more senior friendly. They specialize in helping seniors part with items that clutter or have no valued use, so to make rooms less crowded or to make ready for a move to a smaller living space.
Handicap remodeling services and senior safety services offer help in adding wheelchair ramps and widening doorways. Bathrooms are made more accessible and safe, with hand rails, walk-in bath facilities and easier access to toilets.
If moving to a smaller retirement home or care facility is the best solution there is another senior specialty provider to call on called a Seniors Real Estate Specialist.
The Senior Real Estate Specialist concentrates more on a complete service package for the sale of the property and/or the purchase of a new living arrangement. The specialist also arranges for the services of a relocation specialist or Senior Move Manager to provide a complete, stress-free package for the elderly homeowner.
A move often requires downsizing and getting rid of a tremendous number of acquired possessions. The relocation specialist or Senior Move Manager, as they are often called, will typically provide a turnkey operation that includes assessing and identifying items to keep, arranging for auction or other disposal, cleaning the home, moving the belongings and setting up the new residence. The manager may also work closely with a real estate agent to arrange for the sale of the home and may also be involved in the financial transactions necessary to move into a new living arrangement.
All the help available to seniors may in itself be overwhelming. How do seniors choose the right service provider for their needs? How do they know they will hire someone qualified, responsible and honest? Area Agencies on Aging and State Better Business Bureaus are good resources to check out available service providers.
Family, friends and religious leaders can be valuable resources to seniors in referring service providers and helping to manage the hiring and supervision.
The National Care Planning Council’s website www.longtermcarelink.net provides educational articles and information on eldercare providers throughout the nation.
Wednesday, May 11, 2011
Wednesday, April 20, 2011
Using Your Home Equity for Long Term Care
In my business as a Professional Geriatric Care Manager, many seniors and their families come to me with questions about how to pay for long term care. Most seniors want to stay in their own homes, and some may be able to if they can afford the care that they require now, and in the future. For many seniors the equity in their home is their largest single asset, yet it is unavailable to use unless they use a home equity loan. But a conventional loan really doesn't free up the equity because the money has to be paid back with interest.
A reverse mortgage is a way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage".
Many seniors are finding they can use a reverse mortgage to pay off an existing conventional mortgage, to create money to pay off debt, make home repairs, or for remodeling.
For those seniors who are in need of long term care and want to stay in their home, a reverse mortgage can create the money needed to pay for in-home personal and medical care. They can also pay for needed medical equipment and handicap adaptation to their home.
There are no income, asset or credit requirements. It is the easiest loan to qualify for. You must be at least 62, own and live in, as a primary residence, a home [1-4 family residence, condominium, co-op, permanent mobile home, or manufactured home] in order to qualify for a reverse mortgage.
A reverse mortgage is similar to a conventional mortgage. As an example:
• The bank does not own the home but owns a lien on the property just as with any other mortgage
• You continue to hold title to the property as with any other mortgage
• The bank has no recourse to demand payment from any family member if there is not enough equity to cover paying off the loan
• There is no penalty to pay off the mortgage early
• The proceeds from a reverse mortgage are tax-free and can be used for any legal purpose you wish
False Beliefs Regarding Reverse Mortgages
• "The lender could take my house." The homeowner retains full ownership. The Reverse Mortgage is just like any other mortgage; you own the title and the bank holds a lien. You can pay it off anytime you like.
• "I can be thrown out of my own home." Homeowners can stay in the home as long as they live, with no payment requirement.
• "I could end up owing more than my house is worth." The homeowner can never owe more than the value of the home at the time the loan is due.
• "My heirs will be against it." Experience demonstrates heirs are in favor of Reverse Mortgages.
There are some things to be aware of when thinking of using a reverse mortgage. According to Walter Updegrave, a senior editor at MONEY Magazine and author of "Investing for the Financially Challenged," closing costs and other fees can run into thousands of dollars. If the borrower remains in their home for many years after taking the reverse mortgage, and uses the money to stay independent by paying for caregivers, for example, then the costs may be worth the risk. If, however, the borrower dies or has to move to a more protected environment within a few years, the fees may not be worth it. (http://money.cnn.com/2004/03/30/pf/expert/ask_expert/)
The amount of reverse mortgage benefit for which you may qualify, will depend on
• your age at the time you apply for the loan
• the reverse mortgage program you choose
• the value of your home
• current interest rates
• and for some products, where you live
As a general rule, the older you are and the greater your equity, the larger the reverse mortgage benefit will be (up to certain limits, in some cases). The reverse mortgage must pay off any outstanding liens against your property before you can withdraw additional funds.
The loan is not due and payable until the borrower or borrowers no longer occupy the home as a principal residence (i.e. the borrower sells, moves out permanently or passes away). At that time, the balance of borrowed funds is due and payable, all additional equity in the property belongs to the owners or their beneficiaries.
Other considerations regarding reverse mortgages are that interest rates and fees can vary widely among reverse mortgage lenders. Mr. Updegrave states, “… it can be very difficult to compare the true costs of different loans from different lenders. The best way to do that is to compare each loan's ‘TALC,’ or total annual loan cost.
This figure, which reverse mortgage lenders are required to disclose by federal truth-in-lending laws, takes all loan costs into account as well as the timing on the payments you're projected to receive.”
( NEW YORK (CNN/Money) - What are your feelings pro and con about reverse mortgages?
-- Josephine Amato, Wyckoff, New Jersey) (http://money.cnn.com/2004/03/30/pf/expert/ask_expert/)
The most popular reverse mortgages are the so-called HECM loans. HECM loans require that the applicant meet with a government approved counseling agency to be sure the applicant understands the reverse mortgage process.
The Federal Trade Commission states:
“Before applying for a HECM, you must meet with a counselor from an independent government-approved housing counseling agency. Some lenders offering proprietary reverse mortgages also require counseling. The counselor is required to explain the loan’s costs and financial implications, and possible alternatives to a HECM, like government and nonprofit programs or a single-purpose or proprietary reverse mortgage. The counselor also should be able to help you compare the costs of different types of reverse mortgages and tell you how different payment options, fees, and other costs affect the total cost of the loan over time. Most counseling agencies charge around $125 for their services. The fee can be paid from the loan proceeds, but you cannot be turned away if you can’t afford the fee.”
A Reverse Mortgage Specialist in your area can answer your questions, calculate the amount of loan you can receive and advise the type of loan for your needs. The National Care Planning Council (http://longtermcarelink.net/a7reversemortgage.htm) has a list of Reverse Mortgage Specialists in your area. Also, the AARP website has a section on reverse mortgages at http://www.aarp.org/money/credit-loans-debt/reverse_mortgages/. Do your homework and make sure that you also consult with your own financial advisor about whether a reverse mortgage is the best way for you to utilize the equity in your home.
A reverse mortgage is a way of tapping into home equity without creating monthly payments and without requiring the money to be paid back during a person's lifetime. Instead of making payments the cash flow is reversed and the senior receives payments from the bank. Thus the title "reverse mortgage".
Many seniors are finding they can use a reverse mortgage to pay off an existing conventional mortgage, to create money to pay off debt, make home repairs, or for remodeling.
For those seniors who are in need of long term care and want to stay in their home, a reverse mortgage can create the money needed to pay for in-home personal and medical care. They can also pay for needed medical equipment and handicap adaptation to their home.
There are no income, asset or credit requirements. It is the easiest loan to qualify for. You must be at least 62, own and live in, as a primary residence, a home [1-4 family residence, condominium, co-op, permanent mobile home, or manufactured home] in order to qualify for a reverse mortgage.
A reverse mortgage is similar to a conventional mortgage. As an example:
• The bank does not own the home but owns a lien on the property just as with any other mortgage
• You continue to hold title to the property as with any other mortgage
• The bank has no recourse to demand payment from any family member if there is not enough equity to cover paying off the loan
• There is no penalty to pay off the mortgage early
• The proceeds from a reverse mortgage are tax-free and can be used for any legal purpose you wish
False Beliefs Regarding Reverse Mortgages
• "The lender could take my house." The homeowner retains full ownership. The Reverse Mortgage is just like any other mortgage; you own the title and the bank holds a lien. You can pay it off anytime you like.
• "I can be thrown out of my own home." Homeowners can stay in the home as long as they live, with no payment requirement.
• "I could end up owing more than my house is worth." The homeowner can never owe more than the value of the home at the time the loan is due.
• "My heirs will be against it." Experience demonstrates heirs are in favor of Reverse Mortgages.
There are some things to be aware of when thinking of using a reverse mortgage. According to Walter Updegrave, a senior editor at MONEY Magazine and author of "Investing for the Financially Challenged," closing costs and other fees can run into thousands of dollars. If the borrower remains in their home for many years after taking the reverse mortgage, and uses the money to stay independent by paying for caregivers, for example, then the costs may be worth the risk. If, however, the borrower dies or has to move to a more protected environment within a few years, the fees may not be worth it. (http://money.cnn.com/2004/03/30/pf/expert/ask_expert/)
The amount of reverse mortgage benefit for which you may qualify, will depend on
• your age at the time you apply for the loan
• the reverse mortgage program you choose
• the value of your home
• current interest rates
• and for some products, where you live
As a general rule, the older you are and the greater your equity, the larger the reverse mortgage benefit will be (up to certain limits, in some cases). The reverse mortgage must pay off any outstanding liens against your property before you can withdraw additional funds.
The loan is not due and payable until the borrower or borrowers no longer occupy the home as a principal residence (i.e. the borrower sells, moves out permanently or passes away). At that time, the balance of borrowed funds is due and payable, all additional equity in the property belongs to the owners or their beneficiaries.
Other considerations regarding reverse mortgages are that interest rates and fees can vary widely among reverse mortgage lenders. Mr. Updegrave states, “… it can be very difficult to compare the true costs of different loans from different lenders. The best way to do that is to compare each loan's ‘TALC,’ or total annual loan cost.
This figure, which reverse mortgage lenders are required to disclose by federal truth-in-lending laws, takes all loan costs into account as well as the timing on the payments you're projected to receive.”
( NEW YORK (CNN/Money) - What are your feelings pro and con about reverse mortgages?
-- Josephine Amato, Wyckoff, New Jersey) (http://money.cnn.com/2004/03/30/pf/expert/ask_expert/)
The most popular reverse mortgages are the so-called HECM loans. HECM loans require that the applicant meet with a government approved counseling agency to be sure the applicant understands the reverse mortgage process.
The Federal Trade Commission states:
“Before applying for a HECM, you must meet with a counselor from an independent government-approved housing counseling agency. Some lenders offering proprietary reverse mortgages also require counseling. The counselor is required to explain the loan’s costs and financial implications, and possible alternatives to a HECM, like government and nonprofit programs or a single-purpose or proprietary reverse mortgage. The counselor also should be able to help you compare the costs of different types of reverse mortgages and tell you how different payment options, fees, and other costs affect the total cost of the loan over time. Most counseling agencies charge around $125 for their services. The fee can be paid from the loan proceeds, but you cannot be turned away if you can’t afford the fee.”
A Reverse Mortgage Specialist in your area can answer your questions, calculate the amount of loan you can receive and advise the type of loan for your needs. The National Care Planning Council (http://longtermcarelink.net/a7reversemortgage.htm) has a list of Reverse Mortgage Specialists in your area. Also, the AARP website has a section on reverse mortgages at http://www.aarp.org/money/credit-loans-debt/reverse_mortgages/. Do your homework and make sure that you also consult with your own financial advisor about whether a reverse mortgage is the best way for you to utilize the equity in your home.
Sunday, February 13, 2011
Planning Ahead for ElderCare
I've received more requests than usual recently for assistance with planning ahead for aging parents. This is an indication that more people are seeing what is happening around them with long term care. The general population has no idea what services are available, appropriate, affordable to alleviate stress and improve quality of life as we age.
Take a look around. Talk with your friends and neighbors. Notice how many people are engrossed in the task of caregiving. Tell them there is hope. There are resources. And there are experts in the field that can guide and assist them through their journey.
Make sure you are educating yourself about what your parents need, what they have, and what they do not have. Where are their finances? Who are their doctors? What hospital do they prefer? What legal documents have they updated (healthcare Powers of Attorney, financial POAs, Trusts, Living Wills, etc.).
Don't wait for the crisis. Plan ahead. You will be much more prepared and experience less stress if you take your head out of the sand and look around to prepare.
Take a look around. Talk with your friends and neighbors. Notice how many people are engrossed in the task of caregiving. Tell them there is hope. There are resources. And there are experts in the field that can guide and assist them through their journey.
Make sure you are educating yourself about what your parents need, what they have, and what they do not have. Where are their finances? Who are their doctors? What hospital do they prefer? What legal documents have they updated (healthcare Powers of Attorney, financial POAs, Trusts, Living Wills, etc.).
Don't wait for the crisis. Plan ahead. You will be much more prepared and experience less stress if you take your head out of the sand and look around to prepare.
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