Funding long-term care with a reverse mortgage: Why more elder care attorneys are recognizing the benefits
Seven in 10 of today’s 65-year-olds are expected to need some type of long-term care before the end of their life. The larger challenge is that most Americans lack long-term care insurance to finance growing health needs, which can devastate their retirement savings.
The $6.5 trillion in home equity owned by households with a member age 62 or older can serve as a viable funding source through a Home Equity Conversion Mortgage (HECM), also referred to as a reverse mortgage loan.
Educating your clients on the long-term financial benefits
Reverse mortgages allow your older clients to leverage their home equity as a lump sum, monthly payments, or a line of credit* that’s available if and when they need it — all while living in and retaining ownership of their home. As with any mortgage, the borrower must meet their loan obligations, keeping current with property taxes, insurance, and maintenance. The proceeds may be used to pay for long-term care insurance or for at-home care services directly to make aging at home possible and more affordable.
Another distinct benefit of a reverse mortgage is that, unlike long-term care insurance, applicants generally cannot be denied for health reasons alone.
Reverse mortgages are compatible with life estates and certain trusts. Should your clients be concerned to learn how to configure a transaction that incorporates life estates and trusts, it’s imperative to work with an experienced lender, like Reverse Mortgage Funding, that can help them easily navigate the process.
Through recent regulatory changes, and RMF’s cost-friendly programs, reverse mortgages today are associated with fewer fees and less risk for your clients. As with any mortgage, they’re expected to meet their loan obligations, keeping current with property taxes, insurance, and home maintenance.
When advising your clients on their long-term care options, a reverse mortgage may be a critical part of their overall plan. At Reverse Mortgage Funding, we can help guide them through the process with your counsel to ensure they’re making a sound and strategic financial decision.
Reach out for details on putting reverse mortgages to work for your elder care clients and their families.
*Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable-rate mortgages.