Anyone who plans to stay in their house into old age should consider getting a Home Equity Conversion Mortgage.
If you already know you are going to need to tap the equity of your house to make ends meet, read more about the new Reverse Mortgages (renamed HECMs) here:
Conversely, even if your house is paid off, anyone who is implicitly considering their home equity as a source of funds in case of long-term care needs should consider opening a special new kind of mortgage, a HECM, a line of credit. They are available to people over 62 who have good credit histories. There’s a special loophole in there that makes it particularly beneficial if you open it up well before you need it. They can, in some situations, pay you more than the value of your house. Read more about HECM LOCs:
There’s a third cool option to do with HECMs: you can turn them into a cash stream with something called “tenure payments”. Read more about HECM tenure payments:
This is why financial planners exist, to find tips like this! My favorite option is the HECM LOC. It has closing costs, but they’re possibly less than paying for Long-Term Care Insurance. The other options are quite as appealing, but can be lifesavers if you have no other option than selling the house.
The Commonwealth of MA requires people to obtain counseling in advance from an approved credit counselor within six months of applying. There aren’t any approved HUD counselors in Franklin County, but I have an approved counselor come to my office once in a while.
Let me know if this is something you’re interested in learning more about. Meeting with the counselor costs about $225 and the certificate she gives you is only good for about six months so it’s good to hash this out together before we involve anyone else.
Originally sent in an email in January, 2017, updated and published November, 2017