As a follow-up to our previous post on “Resources For Living Independently” we will take a deeper look at solutions available to Seniors who want to stay at home.
Many older Americans are finding it necessary to tap into their home’s equity as a resource to be able to stay in their home. This week we will look at a variety of solutions to using the equity in your home to pay for the help you need.
These include grants and loans from local government, such as home improvement loans that are filed on the residence as a mortgage that is released without need for repayment after a period of years. This type of program does not require a monthly payment and so income is not a factor in qualifying.
A homeowner with sufficient income will qualify for a traditional loan from a bank or a licensed lender. These loans may be for a specific purpose, such as replacing the roof, or may be consolidation loans that combine the balances of existing loans to reduce monthly payments.
When a loan of this type is filed as a mortgage, it is called a home equity loan. These loans do require monthly payments by the homeowner through which the homeowner returns the principal amount of the loan along with the interest that accrues during the term of the loan. The problem for retirees with this type of loan is that they may not be able to make the payments, in which case they have put their home at risk. Some even get on a treadmill, obtaining a series of larger home equity loans – the purpose of each – to get caught up on the payments of the previous loan.
A related discussion can be found in the National Council on Aging “Use Your Home to Stay at Home” report.
Next week we will look at a long-term solution to help older Americans stay in their homes and have the money to pay for their daily needs that doesn’t involve monthly payments or require income to qualify. Anybody guess what it might be?
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100% financing, as the name implies, offers complete financing of your property. The other option, 80/20 finance your mortgage with two loans. Loans may be made by the lender, but sometimes the seller or the lender is obligated to reach second mortgage of 20%.
100% financing is easier to handle, but not all lenders offer this type of loan.
Qualifications for the Zero-Down
Jara,
Thanks for the great feedback. Feel free to link back to our post.
John Krajsa
AFC Reverse Mortgage
Senior housing is a kind of facility where seniors get different services and amenities to enhance their life. At there they get assistance where they ask and on the hand they have total independence which is most important factor that all seniors look for.
Daniel, thanks for the comment. There are a variety of housing options available for seniors, including assisted living facilities and nursing homes. We are focusing here on the option of staying in the home, which is the preference of many senior homeowners. Staying in the home allows seniors to continue to live their life in the manner they have been accustomed, in many cases remaining close to their support network of friends, relatives, and neighbors they have known for many years. It is also frequently the least costly alternative, both from the viewpoint of the homeowner and from a societal perspective. However, staying in the home is just one of the available options and is not for everyone, and senior housing is a viable alternative not only for those with physical impairments but also for those who just prefer the atmosphere and support network found in a senior housing environment.