How to Use Home Equity to Pay for Senior Care
Home equity is the difference between how much you owe on your home and your home’s current value. If you decide to pull this equity out of your home, you can use it for many different reasons, one of them being healthcare expenses. This includes senior care options like long-term care, short-term care, rehabilitation, and therapy.
There are ways you can access your home equity to pay for senior care. The following options are available to homeowners:
Home Equity Line of Credit: Unlike conventional loans, a Home Equity Line of Credit is established ahead of time and used when and as needed. This is similar to a credit card, except that a HELOC uses your home as collateral. There is a credit limit and a specific borrowing period in which you can withdraw money. These need to be paid off monthly and charge varying interest rates.
Reverse Mortgage: A reverse mortgage is a home equity loan for homeowners 62 and older. You can supplement your income with this loan by using the equity in your home. In order to qualify, homes must meet FHA property guidelines and flood requirements. Once the lender evaluates the borrower’s credit, income, assets, and monthly expenses, payment is made to the borrower. After the borrower dies, sells their home, or moves out permanently, the loan must be repaid.
At Castleton Health Care Center, we recognize that financial planning for senior care can be a stressful time. Whether it is insurance providers, copay plan distribution or other types of financial programs, our professional and knowledgeable financial assistance team has experience navigating the complexities of each. Give us a call today at (317) 845-0032 and we will gladly assist you.