|Posted on July 24, 2011 at 8:39 PM||comments (166)|
In a previous blog I wrote about available funding sources for home modifications. At the time, I avoided a discussion about reverse mortgages given the loss of equity many people experienced during the market meltdown. I do believe, however, that reverse mortgages are a viable product for older homeowners who want to use some of the equity in their homes for aging-in-place style renovations . The caveat being that you must first do your homework, consider all your options, and realistically assess your short and long term financial needs so as to understand the financial consequences of this type mortgage loan.
Reverse mortgages are administered by the U.S. Department of Housing and Urban Development (HUD) and the program is called the Home Equity Conversion Mortgage (HECM). Before obtaining a reverse mortgage, it is required that you receive consumer information from an approved HECM counselor.
So how does a reverse mortgage work? Reverse mortgages allow you to borrow on the equity in your home. Your home is used as collateral to get cash and instead of you making payments to the lender, the lender makes payments to you. Payments can be made as a lump sum, monthly for as long as you live in your home, set up as advances when needed through a line of credit, or any combination of the above. The loan plus interest is paid off whenever the property is sold - even if the sale price is less than the amount owed the lender. By law, lenders cannot go after a homeowner’s other assets or his/her estate if the home sells for less than the reverse mortgage amount. Instead HUD backs up these mortgages and pays back the difference.
Who qualifies for a reverse mortgage? To qualify you must be 62 or older, own the property, live in the home as a primary residence, and make the reverse mortgage the first mortgage, meaning any existing mortgages will be paid off by the proceeds of the reverse mortgage. You must also keep current on taxes, insurance and maintenance. The borrower’s credit history is irrelevant and FICO scores do not come into consideration.
What are the advantages of a reverse mortgage? 1) It will pay off the current debt on your home. 2) You take cash from your home’s equity without having to pay anything monthly. 3) The loan proceeds can be used for any purpose. 4) Money not withdrawn immediately can be drawn via several different payment options. 5) Lenders cannot force you to sell the property to pay back the loan so reverse mortgages guarantee that you can remain in your home for as long as you live, even if the mortgage loan and interest exceed the property’s value.
What are the disadvantages of a reverse mortgage? 1) The fees for this type of mortgage are higher than fees for a conventional mortgage. 2) Since a reverse mortgage enables you to use a portion of your home's equity, future equity is reduced. 3) Substantial equity is usually required in order to qualify for a reverse mortgage.
Unfortunately, there seem to be many misperceptions about reverse mortgages. If you have some reason for considering this type mortgage, the smartest approach is to investigate it for yourself and then decide. Reverse mortgages potentially provide valuable income, cash reserves, or debt relief. The money received from a reverse mortgage might be the only way you could afford to modify your home in order to age in place. Research reverse mortgage options carefully and get sound, professional advice from your legal or financial advisors. Understanding the truth about reverse mortgages will enable you to make a rational, well-informed decision about whether or not the program is right for you and your circumstances.
|Posted on June 23, 2011 at 2:19 PM||comments (712)|
An Aging in Place specialist is someone who is trained and certified in helping people remain in their homes beyond retirement. These professionals have developed skills to assess the needs of seniors and evaluate their home environments for potential modifications designed specifically for changing needs.
Aging in Place professionals are trained to listen carefully to clients and their caregivers, and to observe the physical conditions of a home. They have the knowledge and experience to provide practical, individualized solutions to a problem. They do not bring a generic approach to home modifications but rather select from any number of relevant options. Aging in Place professionals are not only trained in the physical issues of aging but also in those products on the market designed to aid in those issues.
Aging in Place professionals have been taught the techniques and strategies for designing barrier-free living environments. Their goal is to modify or remove any architectural feature in a home that would interfere with safety, comfort or independence while at the same time maintaining an attractive environment suited to their client’s lifestyle. Sometimes it is a combination of structural renovations along with specialized equipment that alters the home environment sufficiently so as to allow an individual to age in place.
While an Aging in Place specialist may be a contractor, not all contractors are Aging-in-Place professionals. You might call in a contractor to install a grab bar, but the question of which shape/sized grab bar is best, where it should be located for your specific ailment, or whether a grab bar is even the correct solution is not something a contractor is trained to answer.
So what special training does an aging-in-place professional get? There are actually a number of certification programs throughout the country geared specifically towards training professionals in the field of aging-in-place. People come from a number of different professions and perspectives – occupational therapists, remodelers and builders, geriatric care managers, architects, nurses, interior designers, and medical equipment suppliers to name a few. The programs vary widely in scope and duration. I’m familiar with two of the programs as I, myself, have completed both the University of Southern California’s Home Modification Certification and the National Association of Home Builders’ CAPS program. Please note that I am not suggesting that the three programs listed below are the only programs available – they are just the ones I am aware of.
The University of Southern California offers an Executive Certificate in Home Modification through its National Resource Center on Supportive Housing and Home Modifications. This program is designed for professionals who work directly or indirectly in the field of supportive home environments. This is a five month course that includes home modification research, product and design layouts, common modification issues, case studies, funding strategies, ethics, and community planning.
Georgia Tech offers a Certificate in Workplace Accommodations and Home Modifications. Coursework is geared to applying assistive technology and accommodation strategies in home, work, educational, and public settings and to identifying needed assistive technology and environmental accommodations for individuals with disabilities. The Program consists of eight courses ranging from fundamental strategies for workplace and home modifications to universal and accessible design for public spaces .
CAPS (Certified Aging in Place Specialist) is accreditation earned through the National Association of Home Builders. In three days of coursework, the CAPS curriculum incorporates a variety of information tailored to aging-in-place home modifications, including: background on the older adult population; communication techniques; common aging-in-place remodeling projects; marketing to the aging-in-place market; common barriers and solutions; codes and standards; product ideas and resources; and business management.
If aging-in-place is something you’re determined to do, it’s important to plan ahead so as to incorporate appropriate modifications that will meet your changing needs as you age. If you take the time to plan home modifications before you need them, you can ensure they are designed properly and add value to your home. Aging in Place Specialists are available to help.
|Posted on June 15, 2011 at 7:26 AM||comments (208)|
America is aging at a tremendous rate. 10,000 people in the U.S. turn 65 every day, a rate that will continue for 20 years. By 2050, over 20% of Americans will be over the age of 65. Unfortunately, elder abuse is a growing problem.
Elder mistreatment is defined as intentional actions that cause harm or create a serious risk of harm (whether or not harm is intended) to a vulnerable elder by a caregiver or other person who stands in a trust relationship to the elder. This includes failure by a caregiver to satisfy the elder’s basic needs or to protect the elder from harm. The specificity of laws varies from state to state, but broadly defined, abuse may be:
Elder abuse can affect people of all ethnic backgrounds and social status and can affect both men and women. Victims of elder abuse are known to experience depression, anxiety and other mental health issues. Elders who experienced mistreatment, even modest mistreatment, had a 300% higher risk of death when compared to those who had not been mistreated.
Sadly, it is known that in 90% of all reported elder abuse cases the abuser is a family member. Researchers have estimated that anywhere from five to twenty-three percent of all caregivers are physically abusive. Most agree that abuse is related to the stresses associated with providing care.
While we don't know all of the details about why abuse occurs or how to stop its spread, we do know that help is available for victims. Know the warning signs of a possible problem so that you can make a call for help if an elder is in need of assistance.
While a single sign does not necessarily indicate abuse, some tell-tale signs that there could be a problem are:
If you think someone is in danger,contact the Eldercare Locator for state specific information at 1-800-677-1116.
|Posted on March 5, 2011 at 10:45 AM||comments (160)|
Rising costs and lack of public subsidies have made assisted living facilities expensive. According to the Genworth 2010 Cost of Care Survey, the national median monthly cost of an assisted living facility (one bedroom, single occupancy) is $3,185 per month. In general, 75% of this cost is paid by residents out of personal funds or family assistance. The national median daily rate for nursing home care is $185 for a semi-private room, $206 for a private room or approximately $70,000 per year. About 1/3 of all nursing home residents pay from their own funds.
Contrast that to the cost of renovating your home. A small ramp will cost under $500. Bathroom remodeling, including replacing the tub with a walk-in shower, should run approximately $15,000. For those who might need a stairlift, they can be found for under $2,000 on up depending on the configuration of your stairs. Bottom line - for well under $20,000 you can prepare your own home for your future needs.
So the big question is how to pay for home modifications. In today's market most people are experiencing a loss of equity in their homes which makes a line of credit or a reverse mortgage not feasible. Medicare does not pay for any home renovations - not grab bars, comfort height toilets, non-slip floor coatings, wider doorways or accessible vanities. Instead, Medicare will pay for medically necessary durable medical equipment as prescribed by a doctor. Translated this means that wheelchairs, toilet commodes and shower benches are covered but none of these items are particularly attractive or add any value to your home.
There are, however, some resources that might help defray the costs of accessibility modifications.
1. Long Term Care Insurance. While traditional health insurance does not provide for home modifications, many long term care policies include some coverage. If you are a senior and had the foresight to have purchased long term care insurance, check out your policy. If you are a baby boomer, make a note to yourself to investigate the benefits of a long term care policy. Given the increasing cost of health care and the age to which we now live, long term care insurance might be something you want to carefully consider.
2. Department of Veteran Affairs. The VA has four types of home modification programs depending on the level of disability. For more information on these VA grant programs or to obtain grant application forms, you can contact the VA at 800-827-1000 or visit the VA's website at www.va.gov
3. Community Development Block Grants (CDBG). The Community Development Block Grant program enables local governments to undertake a wide range of activities intended to create suitable living environments, provide decent affordable housing and create economic opportunities, primarily for persons of low and moderate income. Contact your local county or city government to find out the status of money available for accessibility modifications.
4. Tax Savings. Tax deductions are allowed for certain modifications such as the installation of ramps, widening doorways, modifying kitchen cabinets, installing bath fixtures, etc. To do so, the cost of the modifications must be treated as a medical deduction and be certified by a physician as being required for health reasons. The renovations also can't add to the property's overall value. Check with your accountant for details.
5. State Assistive Technology Projects. Several states have initiated home modification programs through their statewide Assistive Technology program. These programs can provide trial equipment as well as low-interest loans for the purchase of assistive technology or home modifications for individuals with disabilities.
6. The U.S. Department of Agriculture (USDA). The USDA has created the Rural Development Home Repair Loan and Grant Programs (aka Section 504 programs) to provide assistance to those who live in areas with a population less than 10,000. This program offers low-interest loans to homeowners of all ages and grants to those aged 62+ who meet certain income criteria, in order to help with home repairs or modifications for disabilities. Check out www.rurdev.usda.gov
7. Area Agencies on Aging (AAA). Some Area Agencies on Aging have funds to modify homes. Contact your local AAA to find out if programs are available in your area.
8. Centers for Independent Living. The term "center for independent living" means a consumer-controlled, cross-disability, non-residential private non-profit agency that is designed and operated within a local community by individuals with disabilities and provides an array of independent living services. These centers provide information and referrals on how to get funding in your area. To locate a center near you, visit www.ilru.org/html/publications/directory/index.html
We're frequently asked to help locate funding for clients residing outside of Florida. If you know about other funding sources for home modifications that are particular to your locale or state, we'd all love to hear about it.
|Posted on January 15, 2011 at 3:00 PM||comments (142)|
We frequently get calls from out of state family looking for assistance for older family members who live here in Florida. In most cases the parents want to stay in their homes while their adult kids think it might be time to bring them back to live with them or move them into assisted living. We're initially asked to go into the parents' home to evaluate the physical layout for safety, but in time the conversation turns to the need for additional resources. Assistance might be needed for anything ranging from help with simple tasks like shopping, driving, and cooking to those involving personal hygiene and companionship.
Enter the home health agencies who offer a range of services designed to meet the needs of those who are aging or dealing with chronic illness. In South Florida alone, there are over 1,000 private home health agencies licensed to provide private duty home health care to people in need. That number is staggering. How do you decide which to use for care? How do you begin to compare the level of services offered and evaluate the quality of those services? What questions should be asked before bringing a stranger into your home?
I asked Scott Greenberg, Statewide Board Member of the Florida State Guardian Association and Vice President of the local chapter, Member of the Legislative Committee of the PBC Partnership for Aging, and President of Comforcare Home Care, a private home health company, for help in answering these questions.
"There really are differences in agencies and finding the right agency for you can be daunting but taking the time to make an informed choice is very important," says Scott. He suggests beginning with the following questions when interviewing potential providers:
I then asked Scott to explain how his own agency is an example of quality service so as to better understand what to look for when evaluating other companies.
"All our caregivers are our employees and covered by workers comp, bonded and covered by both supplemental auto and liability insurance. We provide references on request and can even arrange an interview with a caregiver if desired prior to providing service. We conduct specialized training in areas such as Jewish Cultural Traditions as well as keeping kosher for those to whom that is important. We contracted with the Alzheimer's Association to conduct a higher level of training for our caregivers than the state requires. 20 years of combined experience, advocating for senior causes, and being an active volunteer in the community is a differentiator for us and you should look for help from people with that same level of commitment to excellence."
Let's remember that aging in place is an achievable lifestyle choice that might require some additional help where necessary. Combining a safe and comfortable home environment with appropriate home health care will allow most seniors to stay in their homes rather than having to move into a facility.