Nursing Homes in Crisis: Finance Your Home Care with a Reverse Mortgage
Aging at home — with the help of a reverse mortgage
Over the past 15 months, there has been a national nursing home crisis. The COVID-19 pandemic swept through facilities across the country, preying on one of our most vulnerable populations. According to the COVID Tracking Project, more than 1.3 million residents and staff of long-term care facilities were infected with COVID-19 — and over 170,000 died as a result.
With the availability and increase in vaccinations, nursing homes are emerging from lockdown and adjusting to the new normal. But is the damage already done? Should seniors start exploring alternative options to nursing homes?
According to a study by the National Investment Center for Seniors Housing & Care, the pandemic’s toll on nursing homes drove occupancy down significantly — and not just from the death toll. A steep decline in new admissions added to a vacancy rate of more than 35% at over 14,000 nursing home facilities in the United States.
Prior to the pandemic, it wasn’t uncommon for illnesses and infections to easily spread throughout nursing homes. It can be difficult to avoid with a large number of immuno-compromised people in one building, often using the same common areas and sharing staff. But the spread of COVID-19 only worsened the public’s perception of these facilities, creating the nursing home crisis narrative.
Nursing homes are also associated with high turnover from overworked, underpaid employees. In fact, more than one in four nursing homes had direct care staffing shortages each month since the beginning of June 2020, according to AARP's Nursing Home Dashboard. And 23% didn’t have a one-week supply of personal protective equipment (PPE) for employees.
When considering future care needs for yourself or a loved one, home care is quickly becoming a more attractive alternative option to nursing homes. In fact, 77% of older Americans would prefer to receive care at home, rather than at a long-term care facility. Aging at home allows you to enjoy more privacy, comfort and independence, receiving services that are one-on-one and tailored to your specific needs. Depending on your situation, a reverse mortgage loan may be able to help may be able to help with financing your home health care.
Read more: Home Health Care Financing with a Reverse Mortgage Loan
Exclusively available to homeowners and homebuyers age 62 and older, a reverse mortgage allows you to borrow against the equity in your home — all while still living it and maintaining ownership. In doing so, it provides funds as a lump sum, monthly payment, or a line of credit** that’s there if you decide to help finance your home health care. As with any mortgage, you’re still responsible for meeting the loan obligations, such as keeping current with property taxes, insurance, and basic home maintenance.
If you or your spouse end up needing nursing home care in the future, a reverse mortgage may still be a viable option. Previously, a borrower moving to a healthcare facility for 12 consecutive months would cause the loan to become “Due and Payable” unless a co-borrower remained in the home. However, the U.S. Department of Housing and Urban Development (HUD) recently made changes to the loan’s guidelines. Eligible Non-borrowing spouses can remain in the home if their partner moves out for 12 consecutive months or more for medical reasons in a healthcare facility(or, as had also been provided for in previous guidelines, passes away). As always, we recommend that you speak with a trusted financial advisor regarding your personal situation.
Preparing for what’s ahead
Approximately one in three 65-year-olds will live past age 90, and one in seven will live past age 95. Living a long life means you’ll have to plan ahead to ensure your good health and comfort. To learn if you make a good reverse mortgage candidate, contact Reverse Mortgage Funding (RMF) at (888) 277-1567. We’ll schedule an in-person appointment with a local loan specialist at your convenience to get your questions answered.
* As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance and keeping your home in good condition.
** Borrowers who elect a fixed rate loan will receive a single disbursement lump sum payment. Other payment options are available only for adjustable rate mortgages.
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 4.7-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.