Squeezed in the Financial Middle? Reverse Mortgage Benefits for the Sandwich Generation
Nearly half of adults in their 40s and 50s are either raising a young child or financially supporting a grown child, while also worrying about a parent age 65+. Furthermore, 1 in 7 are providing financial support to both an aging parent and their own offspring.
If you find yourself under similar circumstances, you’re likely part of the sandwich generation: Individuals who are sandwiched between their children and their aging parents, caring for both simultaneously and likely feeling the emotional and financial squeeze of shouldering multiple immediate expenses while trying to save for your own retirement.
According to the Pew Research Center, the financial weight associated with caring for multiple generations of family members is mounting. You want to keep everyone happy, safe and healthy, but that tends to come with a high price tag — and a side of stress.
Feeling the personal and financial squeeze?
Caregiver burnout can bring on feelings of guilt, depression and isolation, as well as lack of personal time to manage work, relationships, hobbies and your own finances. Luckily, there are ways to help relieve stress and create a more favorable situation for everyone involved.
- Get an honest and thorough assessment of each dependent’s financial situation and care needs, so you can figure out how much of your own time and resources you need to expend.
- Set boundaries with each dependent party, agreeing to provide a pre-determined amount of support monthly or yearly.
- Maintain open lines of communication regarding everyone’s expectations, and be proactive in resolving issues before they grow into problems.
- If you’re paying rent or housing costs for your adult children or parents, calculate the potential cost savings of having them live in your home.
- Ensure that you’re receiving all applicable tax benefits if eligible adult children are enrolled in higher education.
- Arrange for part-time senior care — an in-home provider or an adult care program — to deliver extra support for your parent(s) when you can’t be there.
- Offer job tips and advice or hire a job coach to help financially dependent adult children get situated in the workforce.
- If your parents are homeowners, suggest that they meet with a qualified professional to learn more about a reverse mortgage loan, which they may be able to use to free up cash from their home’s equity. If so, they could use the funds for their immediate expenses, or as line of credit as a “rainy day fund” to cover costs down the road.
Easing the financial burden with a reverse mortgage
For many retirees, the equity built up in their home can be their most valuable asset. If your parents need to increase their cash flow to cover existing monthly debt payments, medical costs, home modifications, or day-to-day expenses, Home Equity Conversion Mortgage, commonly known as a reverse mortgage loan, can be a smart tool for accessing funds when they’re needed most. This type of loan is exclusively available to homeowners and homebuyers age 62 and older, allowing them to continue to live in and own their home. Designed specifically with the needs of retirees in mind, it offers older homeowners certain advantages over other home equity-based loan options. As with any mortgage, there are loan obligations that must be met, including keeping current with property taxes, insurance and maintenance. But a reverse mortgage can even help make it easier to pay for these expenses.
Another option is an Equity Elite reverse mortgage loan, available exclusively through Reverse Mortgage Funding as the lender.† This fixed-rate loan option is designed for homeowners and homebuyers as young as 60* in certain states, specifically for higher-value homes, condominiums, and those looking for lower up-front costs.
Caring for your family shouldn’t be a drain on your retirement funds, or theirs. Your parents can reach out to Reverse Mortgage Funding at 888-277-1567 to learn more about reverse mortgage financing, and find out if it’s a good solution for them. We’ll set up a convenient in-person appointment with an experienced loan specialist who understands the unique needs of the sandwich generation, and can explain your parents’ options and answer whatever questions they have. We encourage prospective borrowers to include family members and trusted advisors in the process, so they can feel confident that they’re making an informed decision.
You can also get started by reading our new publication “Should My Loved Ones Get a Reverse Mortgage? What Every Family Should Know.”
This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 5-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.
SEE WHAT FUNDS YOU MAY HAVE AVAILABLE
If you have equity in your home and believe you meet the eligibility requirements, a HECM may be the option that could help you retire smart.
This information is intended for those who are interested in financial education. This information is provided for convenience only, and RMF make no warranties concerning the accuracy or completeness of any of the information. Information is subject to change without notice, and RMF is under no obligation to provide updated information. Materials or statements made by a third party and located or posted on the Site are those of the third party and do not necessarily reflect the official policy or position of RMF. This is not financial, tax, compliance or legal advice and should not be taken or relied upon as such. Each individual should consult with his/her financial, tax, or legal professional. All mortgage origination services are provided by Reverse Mortgage Funding LLC, a state licensed mortgage lender, which is licensed or otherwise exempt from state licensing in the states in which it originates mortgage loans.
†Equity Elite Reverse Mortgage (“Equity Elite”) is Reverse Mortgage Funding LLC’s proprietary loan program, and it is not affiliated with the Home Equity Conversion Mortgage (HECM) loan program, which is insured by FHA. Equity Elite is available to qualified borrowers who also may be eligible for HUD, FHA’s HECM program or are seeking loan proceeds that are higher than HUD, FHA’s HECM program limit. Equity Elite currently is available only for eligible properties in select states. Please contact your loan originator to see if it is currently available in your state.
Upon a maturity event, any non-borrowing individuals with an ownership interest in the property, including non-borrowing spouses, will have 90 days to purchase the property from the estate or, if the non-borrower inherits the property, pay the loan in full using any sources of funds available to them. Any non-borrowing individual, including a non-borrowing spouse, should have a plan to pay off an Equity Elite reverse mortgage upon the borrower’s death or any other maturity event. If the non-borrower is unwilling or unable to purchase the property or pay the loan in full, there is no protection for the non-borrower (including a non-borrower spouse) to maintain an interest in the home or to continue residing in the home past the maturity event and the non-borrower may be evicted upon foreclosure. The FHA HECM program has protections in place for certain non-borrowing parties, so a reverse mortgage applicant with certain non-borrowing parties should strongly consider a FHA-insured HECM loan (see HECM guidelines or ask an RMF representative for details). Under the Equity Elite reverse mortgage loan program, a maturity and/or default event occurs when the last surviving borrower no longer lives in the home as his or her primary residence for at least 12 months, the property charges (including taxes, insurance, or any other property charges) are not paid, required repairs are not completed or the property is not maintained, or any other maturity and/or default event, as specified in the Security Instrument, occurs.
*Not applicable in all states; some states may impose a higher age requirement. Visit www.reversefunding.com/equity-elite for details.