Here are considerations for aging in place within your home
Jun 15, 2023, 3:00 PM
Are you wondering where you will spend your sunset years? Do you plan on living them out in your home? If you do, some important areas need to be considered so you and/or your loved ones can comfortably age in place in your home.
- Mortgage – Is the house free and clear, or will it be by the time you retire? If the house still has a mortgage, how will the balance be paid?
- Maintenance – What is the condition of the major components of your home? How much life is left in the roof, the heating and cooling units, and the plumbing and electrical systems? What are the estimated costs of the repairs that may be needed, and who will perform them?
- Social Contact – Will you be able to stay in touch with others, or will staying at home put you in a position of being isolated? Being around others helps provide a sense of well-being. Isolation can lead to depression.
- Vulnerable – Being at home alone puts one at risk in the event of injury or illness. How will you contact others if needed? In addition, elderly people can be vulnerable to fraud. Do you have someone to consult should you need to purchase a product or a service?
- Burdensome – Caring for a home is a big job. A home that needs repair can cause anxiety and be a hazard. It can feel burdensome if you don’t have the funds to repair or update your home, or if you live alone and are the one responsible for all decisions.
We sometimes hear from elderly people who are aging in place in the very home they love. But, due to the repairs needed and the cost of the repairs, they are feeling stuck. They have a fixed income, and they are no longer capable of doing repairs themselves.
Often the homeowner does not realize the resource and equity they have in their home. These ideas may provide some freedom and independence to those who feel they have no choice.
There are choices, though sometimes they are hard for someone to see. We have seen the elderly become isolated because their homes are in such bad repair that no one wants to visit. We have seen homes that are no longer sanitary or safe. The situation can come to the point of leaning on the generosity of others. There are ways to work toward a solution.
These are some solutions for a home that has become a burden:
Are you willing to sell the home? Consider it a blessing that you own it and have something to sell. This can be a hard decision when someone is emotionally attached to the home, or they have hopes of leaving it to a family member. The truth is that holding onto a home that is in disrepair diminishes its value.
Family – When we think about other solutions, Harold Perkins of Galaxy Lending Group, a Rosie on the House Certified Partner, says it is important to start with family. Consider these options:
- Share your home equity with someone in the family. You sell to them, and they rent the home back to you. Even with family, make sure all agreements are written into a contract and signed.
- Refinance the home to have funds to repair it. If you don’t qualify for the refi loan, a family member may be willing to cosign. This might be an option if you plan to leave the home to someone. If they have a vested interest, they may appreciate an opportunity to keep the home in good repair.
- Help a younger member of the family (college or young married couple). Maybe there is someone who could use a hand-up. They might be willing to move in. They could pay rent. Perhaps part of that rent could be in the form of repairs and upkeep as needed.
What about those who do not have a family?
- For smaller needs, you may be able to rely on the goodwill of others such as the Boy & Girl Scouts, church groups, city programs, etc.
- Senior citizen foundations offer good programs. Though these are often only available for those on a very limited fixed income.
- Reverse Mortgage- This can be a good option for those who may not have another source of income. There are two scenarios:
- Your mortgage still has a balance. A reverse mortgage pays off the mortgage with the equity from the home. The loan balance increases, but you never have to make a payment again.
- Your mortgage is free and clear, but you have limited funds for caring for the home.
The reverse mortgage in this instance works like a line of credit. You have no obligation to use the funds, but they are there should you need them. The interest from the loan is added to the loan balance.
Harold confirms that the homeowner does keep the title to the home. There are consumer protections in place with this type of mortgage. Mandatory counseling is required to ensure that the homeowner understands how it works and how to use the loan as intended. There is a formula used that minimizes the risk of the loan from exceeding the value of the home. Your lender can help you figure that out.
It is important to understand the pros and cons of each of these scenarios. Sam Richardson, an attorney at Phocus Insurance Services, tells us that selling has tax consequences that a reverse mortgage does not. While a reverse mortgage may leave little equity in the home, it can put the homeowner in a place to gain independence and maintain their home.
Review your options thoroughly before making any decisions.
** Important: The purpose of this article is NOT to offer legal or financial advice. **
Join Rosie on the House every Saturday from 8 a.m.-11 a.m. on KTAR News 92.3 FM. If you’d like to send us questions or comments, email firstname.lastname@example.org. Follow us on Twitter and “Like” us on Facebook. For more do-it-yourself tips, go to rosieonthehouse.com. An Arizona home building and remodeling industry expert since 1988, Rosie Romero is the host of the syndicated Saturday morning Rosie on the House radio program. Call 888-767-4348 with questions & comments.