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 Health
& Well Being
Use
Your Home to Stay at Home: |
A
Planning Guide for Older Consumers
The following booklet produced by the National Council on Aging
is targeted to homeowners who are currently healthy but should
start thinking about their long-term care needs now. read more...
Use Your Home to Stay at Home: A Guide
for Homeowners Who Need Help Now
The following booklet produced by the National Council on Aging
is targeted to individuals who have immediate healthcare needs
and may qualify for a reverse mortgage to pay for their care.
read more...
Paying
for health care has become a critical issue for older Americans
& their children.
As costs continue to rise for prescription drugs, in-home care,
and physical rehabilitation, seniors are having to shoulder
a larger share of the financial burden or turn to their children
for help.
While Medicare, Medicaid, HMOs, and private insurance pay for
doctor’s visits, hospitalization, and home care, these
plans frequently require co-payments and insurance deductibles.
Medicare does offer prescription drug coverage, but many plans
do not cover related expenses that can help a senior cope with
frailty, illness, or disability, such as home modifications,
transportation, or other comfort-oriented services.
Fortunately, there’s an easier way for seniors to pay
for health care needs. It’s a reverse mortgage, a unique
loan that allows seniors to convert equity in their homes into
available cash.
Different
Needs — One Solution
Everyone’s needs are unique — but a desire to enjoy
a full life is universal. Often, this means having enough money
to cover bills and relieve some of the anxiety that comes from
figuring out how to pay for medical and health-related expenses.
As many seniors have already discovered, a reverse mortgage
can be an excellent financial tool for generating extra income
to cover these costs.
A reverse mortgage enables homeowners 62 or older to convert
part of the equity in their homes into tax-free income without
having to sell the home, give up title, or take on a new monthly
mortgage payment It’s called a reverse mortgage because
the flow of payments is reversed compared to a traditional home
mortgage. The lender makes payments to you, or arranges a line
of credit that’s available for your use. This differs
from a traditional mortgage used to purchase or refinance home,
in which you must make monthly mortgage payments to a bank.
With a reverse mortgage, you retain title to home and can’t
be forced to leave. The loan is repaid when you permanently
leave your home.
The versatility of reverse mortgages has already been demonstrated
by the thousands of seniors who have used tool to alleviate
money worries or to simply make their retirement more comfortable.
As the following profiles of actual borrowers illustrate, seniors
have used reverse mortgages cover a variety of medical and health
care expenses.
Dorothy
Rogers Paid for Her Prescription Medication
For 45 years, Dorothy Rogers has lived in the same
singlestory home in Hampton, NH that she and her
husband, John, and son, Thomas, built together.
Tragically, in August 1976, Mr. Rogers suddenly
passed away just 20 days before retiring.
“I lost John, his insurance, and most of his
pension. I received a little of his pension but
it lasted only about one year,” Mrs. Rogers
says. To make ends meet, Mrs. Rogers relied on her
Social Security. Initially, the monthly Social Security
check she received was enough to survive. But over
time, as inflation increased, the $743 she received
was barely enough to cover her daily living expenses.
“I had a horrendous time paying for things,”
she says. “Every time I went to the grocery
store, I’d have to choose between prescription
drugs or food. In the end, what I was getting from
Social Security was going almost entirely to medicine.”
Those awful days of choosing ended on November 20,
2000, when Mrs. Rogers obtained a reverse mortgage.
She now receives over $1000 a month in extra income
for life! As Mrs. Rogers puts it, her life has completely
changed for the better. She has no problem paying
for prescription drugs, food, or bills.
“I thank God every day that I got a reverse
mortgage,” she says. “I can go see a
movie with the girls now, or get a sandwich. The
first thing I did after getting the loan was go
to the store and buy a steak.” |
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William
Ellis Added a Downstairs Bedroom to Make His Wife
More Comfortable
William Ellis, of Vancouver, WA, has a different
story. In May 1988, his wife, Beulah Maria, suffered
a debilitating
stroke that left her wheelchair-bound. “Her
mind was still sharp but she was left partially
paralyzed on her right side and had problems with
her speech,” says Mr. Ellis. “I certainly
didn’t want to see her put into a nursing
home, I wanted her here with me.”
The solution was to convert the garage into a ground-floor
bedroom to accommodate his wife’s needs. “The
existing rooms and hallways were not wide enough
to accommodate a wheel chair, so we had to make
some modifications,” Mr. Ellis notes.
The modifications cost $42,000. To pay for the work,
Mr. Ellis obtained a reverse mortgage with a line
of credit.
The reverse mortgage paid for the additional room
plus other changes, including a walk-in
shower.
“I got enough money to cover the costs to
make these changes, plus some left over to cover
everyday expenses,” explains Mr. Ellis. “The
reverse mortgage really helped us out.” |
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Versatility
to Meet Your Needs
As illustrated by these real
life stories, the versatility of reverse mortgages can provide
you with a range of
financial options that enable you to choose the kind of health
or personal care you desire, in the setting you prefer.
Because the funds from a reverse mortgage can be taken by the
borrower as a lump sum, monthly payments, line of credit, or
a combination of these, you have tremendous flexibility when
planning how to address your health care needs.
For example, you might choose to receive monthly payments to
budget for often-overlooked needs such as a cleaning
service, grocery delivery, or transportation. Or, you might
select a line of credit because that’s the best strategy
for you to pay your annual Medicare or private insurance deductibles
or HMO co-payments on doctor visits and prescription drugs.
No matter what your needs are, a reverse mortgage gives you
more choices and a better way to plan your own care with confidence.
To learn more, we recommend that you contact a reverse mortgage
lender. The names of lenders in your state
may be found by visiting NRMLA’s Web site, at http://www.reversemortgage.org,
or by calling NRMLA toll-free at 1-866-264-4466.
What Else You Should Know
A reverse mortgage doesn’t
affect your regular Social Security or Medicare benefits. However,
depending on your particular situation, it may affect the benefits
you receive, if any, from the federal Supplemental Security
Income (SSI) program or from state-run programs such as Medicaid.
Because of this, we suggest that you consult with your local
Area Agency on Aging, a reverse mortgage lender, or a benefits
expert to get more information.
To learn more about reverse mortgages, call the National Reverse
Mortgage Lenders Association at
1-866-264-4466 (toll-free) for a copy of its free booklet, Just
the FAQs:
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