The Administration for Community Living (ACL) led the celebration of Older Americans Month last May.
This year’s theme, “Age Out Loud”, gives a fresh voice to getting old. We listened to what our older Americans had to say.
The celebration highlighted many important things our elders need, including housing and financial security.
Wealth in Home Equity
Seniors who have been paying their mortgages over the years and have grown their property’s equity may use their homes to source out funds.
Americans 62 years old and older may tap on their equity to get cash with having to make monthly mortgage payments. This is through an HECM reverse mortgage loan.
Many seniors may not know much about it. Last February, HECM endorsements fell in volume compared to the previous month.
What they may have missed are the benefits seniors can get through an HECM loan. Instead of making monthly payments to the lender, it is the lender who does the payments to the borrower.
What is required from the borrower is to keep current with their property taxes and insurances, and to maintain the home in a decent and livable state. As long as they do not move out of the property, the loan will not be due.
Where Do You Use the Funds?
The cash from the HECM loan can be used in a myriad of ways. It can go towards expenses for home improvements. It can be used to remove health and safety hazards present in the senior’s residence. It can also help cover medical bills or any emergency.
Whatever works for the older adults, the funds can help them out.
The home’s equity is the loan’s collateral. The applicant will have to go through different verifications, including property value appraisal. The fund can be disbursed through or a combination of these methods:
- Term – the sum is divided into equal monthly payments within a specific number of years
- Tenure – the sum is divided into equal monthly payments for the life of the loan
- Lump sum – the full amount expected will be released at closing
- Line of Credit – the borrower may get a portion of the sum as needed until the maximum amount is exhausted.
During the Older Americans Month, we shone some light into programs that will help our older adults live better lives. With the HECM Reverse Mortgage Loan, our seniors’ homes become their blanket of security.