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How Can I Afford to stay in My Home as I Get Older

How Can I Afford to Stay in My House as I Get Older? Or Where Can I Go?

By Barbara Wilson, SRES, Realtor Coldwell Banker

Many homeowners here are over 65, and many have lived in these homes for 25 years or more. Neighbors have told me “I’m staying here until my kids inherit it.” But there often comes a time when assistance is needed to stay, when you become isolated as friends have gone and support is no longer nearby, when the big house and large yard really are too much.

Some have told me staying in the house is “free” because the mortgage is paid off. However, there are still property taxes and maintenance costs which continually increase. And when you need help from house cleaners, gardeners, companions, handymen, “visiting nurses” assistance with daily tasks, medicines, meal preparation or meal delivery, staying isn’t “free”.

So how can you afford the high cost of staying? And if you decide not to stay, where can you go?

In-home health care or companion prices start around $25/hour. 8 hours a day is $6000 a month. If full-time help is needed, that cost is at least $18,000/month. Most people in this area have incomes too high to qualify for programs covering this. But a viable option to consider is the new reverse mortgage, a greatly improved product from the offerings of 10+ years ago.

Reverse mortgages are offered by specialized lenders. There is no payment required as long as the borrower is living in the house, and can be a tax-free payout. The heirs eventually repay, either with cash or by selling the property. If the amount withdrawn by the borrower exceeds the value of the house, the government insurance pays the difference. The borrower will never owe more than the property is worth. And the money can be used as you wish, to avoid foreclosure, to buy another property, repay debts, modify the home, or pay for in-home care.

There are many “where to live” options for the over-55 group. There are apartments in dedicated facilities offering levels of care from fully independent to assisted living and memory care. Detached houses, condominiums, and townhomes are in Walnut Creek, Rossmoor, Sunny Glen and other places. The benefits of communities include less isolation, lower maintenance costs, more activities, security, and quiet neighbors.

With so many options, the time to explore them is now, before you need it. As a Senior Real Estate Specialist Realtor, I am happy to help my clients understand what can be done to help them stay in-house. But I’m also there to help them with the process of de-cluttering, organizing, and preparing to make the move should selling be their choice. So talk with your heirs, your lawyer, and your SRES Realtor to review your options, so you can make the right decision for you, and are as prepared as possible for whatever the future holds.