Use Caution When Using Reverse Mortgages To Pay For In-Home Assistance For The Elderly In Carlsbad
Workers with in home assistance for elderly near Carlsbad and elsewhere have seen a growing trend in the finances of elderly Americans. The “reverse mortgage,” a powerful tool developed to allow seniors to borrow home equity before they actually sell their house, can create more problems than it solves if seniors use it incorrectly.
Study Shows Growth in Popularity
The reverse mortgage is becoming more popular as more Americans hit age 62. That’s the youngest age at which a home owner can take out a reverse mortgage, which is basically a loan against the equity contained in the home.
Normally, that equity is only available when the house is sold and the seller receives its full value. But, if a senior wants to stay in his or her house, a reverse mortgage allows them to use some of that money for expenses.
Paying For In Home Assistance May Not Be The Best Use of Reverse Mortgages
Sometimes seniors take out a reverse mortgage without fully understanding the requirements of the loan. They often stop paying property taxes and insurance premiums, placing their ownership of the house in jeopardy. Or, they forget that the loan must be paid back later with interest, and place themselves in grave financial danger.
Using Up a Valuable Resource
If a senior takes out a reverse mortgage immediately at age 62, that loan may not be available later on when it’s really needed—after a serious injury or other financial crisis. When used correctly, this financial tool is an important safety net, helping to pay for unexpected needs like in-home assistance for the elderly.
In Carlsbad and elsewhere, though, a lack of understanding on the part of many seniors can make it an irresponsible choice that endangers their future. If you are considering using this approach to help your elderly parents with monetary needs, make sure you know exactly how it works and what repayments will be required.