Reverse Mortgages – The Newest Option in Funding Long-Term Care

Reverse Mortgages – The Newest Option in Funding Long-Term Care-According to Mortgage Bankers Association (MBA) announced earlier report showed that, as of July 24 the week of housing loan applications index fell 6.3 percent to 495.4 points. Among them, the purchase index remains unchanged, while the refinancing index fell 11%.

For many of us, Long Term Care is not something that we are eager to learn much about. But the seniors in our families are directly impacted by this necessary cost that could be just the thing they need to stay at home forever.

In this consumer driven economy, there are hundreds of advertisements in our faces every day. The Long Term Care industry is no different. It is difficult to differentiate good business from scams and it often takes additional research to discover the right products or services. There are a lot of options to consider when choosing Long Term Care services, but the biggest issue that concerns most seniors is the question of how they will pay for it.

Help is on the way for those who are concerned about the costs of Long Term Care. There is an option available that will alleviate some financial stress and ensure comfort and peace of mind; this option is a reverse mortgage.

A lot of seniors probably wonder how in the world they can use their home to pay for Long Term Care and I’m about to tell you how.

The truth is, many seniors 62 and older who own their homes are taking advantage of reverse mortgages to pay their LTC premiums. This allows them to hold on to their savings, investments and current income.

The money received from a reverse mortgage is based on the amount of equity currently in the senior’s home. Credit and current income do not affect the reverse mortgage, but the home value and senior’s age is important. The applicant must be at least 62 years old and must have at least 50 percent equity built up in their home.

Once the senior gets approved for a reverse mortgage, they have several options in how they would like to receive their money:

- Lump sum distribution where the senior can receive the money all at once
- Term payments offer the senior the option of receiving monthly payments for ten years
- Tenure payments offer the senior fixed monthly payments for life
- A line of credit allows seniors to access the money when they need it

Seniors also have the choice to choose a combination of these payment options to better suit their individual needs.

Now, where to begin looking for Long Term Care and what plan works best is a different animal. The best advice is to do a lot of research and compare companies before making any financial decisions. Understand, there are a lot of different LTC programs available and ideally, there is one out there for every senior’s different financial situation. Long Term Care is an investment and should be seen as a decision that will impact the rest of a senior’s life. It is best to make an informed decision after comparing and contrasting the best candidates.

It is best to take some time and think about the benefits of both Long Term Care and a reverse mortgage. For many people in need, these two opportunities can team up to be a great deal. There are so many seniors who are unaware that they qualify for a reverse mortgage and are suffering financially without the “just in case” backup of a Long Term Care policy. In the long run, this may wind up costing the senior and their adult children more financial strain because they are not equipped with the tools they need to fund their lifestyle, mortgage payment and costs for Long Term Care. Trust me, I know it all adds up to be very expensive. Living in this economic environment is very expensive, especially for seniors who have little income and nothing to fall back on when they begin to feel financial burden.

Reverse mortgages are not for everyone, but there is a large group of seniors out there that are waiting for an opportunity like this to come knocking at their door. For many seniors this option is the only choice they have to fund Long Term Care, something they currently or will need in the future. No senior should go without a Long Term Care policy as it will save them and their family thousands of dollars. If living in the comforts of home for as log as possible is important, consider the importance of Long Term Care.

Reverse Mortgages – The Newest Option in Funding Long-Term Care-Federal Reserve Chairman Ben Bernanke (Ben S. Bernanke) is trying to present as much as 1.25 trillion U.S. dollars the total amount of housing loans to support the bond program to buy down the cost of borrowing. Data show that, as of now, by the U.S. subprime mortgage crisis triggered by the situation of the credit crunch has led to major financial institutions worldwide suffered nearly 1.5 trillion U.S. dollars of capital losses and credit write-downs.

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