Using Reverse Mortgage To Pay For Long Term Care

When it comes to long term care insurance, seniors have the option to use a reverse mortgage and other options to cover their long-term care expenses. Since long term insurance will ask you to be in excellent health, this isn’t always available to everybody especially for people who are older whose premiums tend to be prohibitive. In case you are at least 62 years old and you own your home, you can obtain a reverse mortgage to cover your care at home costs or your long term care expenses, which insurance policies don’t usually pay for.

A reverse mortgage loan allows you to borrow from the amount that you’ve already paid for your home. You are tapping into cash that’s otherwise made available to you only if you decide to sell your home. The remaining balance of the home equity will be given to your estate.

You can choose to receive monthly payments, as a line of credit, or lump sum. Plus, the proceeds that you receive are tax-free. Although the age of eligibility is 62 years old, it is ideal to wait until you are on your early 70s. If the borrower is much older, he or she will have higher chances of getting a bigger loan.

The federal government has also set some maximum limits regarding the amount of equity that could be borrowed. Generally speaking, just about 50% of the home’s value is made available through reverse mortgage.

You can use the money you get from the reverse mortgage Columbia loan to cover your home health care expenses. Since you should repay the loan once you decide to sell the house, the long term care in another facility cannot be paid for using the reverse equity mortgage unless the property’s co-owner qualifies to continue using the house as his or her primary residence.

Reverse Mortgage and Long Term Care Expenses

A study conducted by The National Council on the Aging (NCOA) revealed that using reverse mortgages to cover long term care expenses at home can help address what continues to be a real problem for most older Americans as well as their families.

The country spent $123 billion in 2000 for the long term care of those who are above 65 years old, with the amount poised to double over the next three decades. Almost half of those costs are covered out of pocket by people and just 3% are paid for the insurance companies while the health programs of the government cover the rest.

The study also showed that out of the 13.2 million reverse mortgage loan candidates, about 5.2 million are either receiving Medicaid or may need Medicaid in case they had to deal with covering the expensive cost of long term care in their homes. This segment of the older population of the country is economically vulnerable may get $309 billion in total from reverse mortgages that could help cover their long term care.

Call Reverse Mortgage Specialists if you want to know if taking out a reverse mortgage is the most suitable option for you.

David Stacey
Reverse Mortgage Specialist
Columbia, SC 29205
(803) 592-6010
http://reversemortgagecolumbiasc.com/