“When we give cheerfully and accept gratefully, everyone is blessed .”- Maya Angelou
THE REVERSE MORTGAGE STANDBY LINE OF CREDIT
When it comes to using a reverse mortgage in retirement planning, there are several strategies that make the standby line of credit feature a “must have” for seniors. In particular, the Reverse Mortgage Standby Line of Credit can be a great solution to help create a senior care funding strategy.
Here are some key considerations for a senior care funding strategy and the standby line of credit:
- In-home care services can reduce the need for expensive nursing homes and improve quality of care.
- Services can gradually be ramped up as needed—from help with household chores, to 24-hour nursing care.
- A Reverse Mortgage Standby Line of Credit can be set up in advance—before care is needed—so funding is at-the-ready.
- Unlike a traditional Home Equity Line of Credit (HELOC), the unused portion of the reverse mortgage line of credit grows over time, allowing access to more funds as the borrower ages. And the line cannot be reduced or revoked by the lender, as long as the terms of the loan are met — ensuring the funds will be there when needed.
- There are no monthly mortgage payments for as long as you live in your home. Homeowners do remain responsible for keeping current with property taxes, required insurance and home maintenance.
- Proceeds are tax-free (this is not tax advice so please consult a tax professional)
- Over 97% of Americans make no advance financial plans for senior care needs. Yet 70% will need some form of senior care in their lifetime.
- Most incorrectly believe their medical insurance will pay for care.
- Annual costs start at approximately $30,000 for in-home care and range up to $94,000 for nursing home care.