The Impact Of A Reverse Mortgage On A Community Spouse

Posted on February 20, 2010 by Beth Paterson, CRMP

I want to provide the facts on a comment I received regarding a reverse mortgage for a couple where one is considered a community spouse, i.e. one living in the community and the other is not and receiving Medicaid assistance. This person stated that if a reverse mortgage was put in place for a couple to provide the money for the expenses where one needs more in home care than the spouse can give, then after the ill person passes away, the remaining “community spouse” would have no or little money AND no place to live.

In reality, the reverse mortgage is a great tool for keeping seniors in their homes and paying for home care whether a single person or as a couple. An additional benefit for them is the reverse mortgage is not considered income so the borrowers may still receive public benefits such as Medicaid or other county benefits in addition to the reverse mortgage. They can also receive VA benefits if they qualify. Depending on the circumstances, Medicaid could cover the home care costs, the reverse mortgage could be used for things not covered by Medicaid and for the needs of the community spouse, i.e. maintaining the home, paying taxes, insurance, auto expenses, groceries, etc.

With both names on title, when the ill person passes away the community spouse would still have a place to live as they can stay in the home because the loan is not due and payable until the home is no longer their primary residence or on the 150th birthday of the youngest borrower. This means they can still have a roof over their head without having to make monthly mortgage or rent payments.

In fact the reverse mortgage can provide funds for more care than selling and moving into senior housing. When one sells, the net proceeds would be used to pay rent in senior housing as well as for home care whereas when staying in ones’ home the expense is lower, there is no rent payment and they would have a roof over their head. One of my Blog articles, “Be Educated About Your Options of Care And Financing The Care,” compares the differences of costs of selling and moving to staying in the home with a reverse mortgage and receiving home care.

Let me share the story of my clients, Bob and Jean. Jean had some memory loss issues so she was in a memory care Assisted Living facility. At the recommendation of their Elder Law Attorney Bob decided to do the reverse mortgage to pay for Jean’s rent and care. Jean was living in a private pay facility so the reverse mortgage allowed her to remain in the same place and not have her rely on government funding. The reverse mortgage provided them the control and choice of where Jean would live. The reverse mortgage also freed up some cash flow for Bob as the community spouse since Jean’s care was no longer coming from his Social Security or pension.

Reverse Mortgage Benefits MN Community Spouse

When Jean passed away the reverse mortgage funds were no longer needed for her care so there was more funds were available for Bob’s use. When Bob needed some additional care assistance of his own the reverse mortgage funds were used for his home care needs. Bob was able to have funds and live in his home until his death several years after the reverse mortgage was originated. This couple received what everyone of us desires: their desired security (having a place to live), independence (not relying on others), dignity (they could make their own decisions), and control (deciding where they were to live).

Experienced reverse mortgage originators along with a team of an Elder Law Attorney, care manager, and home care agency who is familiar with reverse mortgages can to help determine what is right for a senior’s situation especially when they may need home care or the decision of when one may need a care center.

The reverse mortgage can be a lifesaver for seniors even as a community spouse. Through the years I’ve been fortunate to help many seniors in these circumstances providing them with security, independence, dignity, and control.

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-fJ

Review these additional articles for facts and how reverse mortgages have benefited seniors:

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Reverse Mortgage Stories To Warm The Heart

Posted on January 3, 2010 by Beth Paterson, CRMP

Enjoying retirement with a Reverse Mortgage

As we look to staying warm during the winter season, I thought I’d share with you a few of the many client stories that have warmed my heart through the years showing where the reverse mortgage made a difference in the life of seniors.

There have been numerous situations where I have done a reverse mortgage and saved a senior’s home from foreclosure. One in particular had already gone through the sheriff sale. Working with an attorney we were able to help her buy the home back on the last day. We had to jump through many hoops to make it happen but the client was able to stay in her home of many years. She was so appreciative! It always warms my heart when we can help a senior stay in their home as they desire especially saving the home from foreclosure.

Helen really wanted to stay in her home basically no matter what. Her husband was in a nursing home and she was having some health issues so initially her family wanted her to move to senior housing. After talking with them and her social workers I tried to convince Helen to move. Then I received the call from her family saying Helen really wanted to stay in her home and they wanted me to do the reverse mortgage for her.

It was challenging from the standpoint that Helen had some early dementia and couldn’t remember things unless I wrote the answers to her questions under her question – even though the answers were written in my handouts and in my book, the only way Helen could connect the answer to the question was to have them written together. I remember spending a day, yes over 8 hours, with Helen to explain the details then another day to do the application and there were numerous phone calls and mailings in between. She had an attorney involved and had set up a power of attorney but Helen was independent enough to want to be involved through the process. During followup conversations with Helen I found that she did understand the reverse mortgage as a result of my taking so much time with her.

After many conversations with and then with the blessings of her family, social workers, and attorney we did the reverse mortgage for Helen. She was able to stay in her home until her death about 5 years later. Through the years I heard from her caregivers on how the reverse mortgage had made a difference for Helen. When she passed away the family called and asked me to attend her funeral because I had made such a difference in her life. Helen was one of the most challenging clients for me but it was a good feeling that I was able to help her fulfill her dream of staying in her home and that I had also made a difference for the family.

Lucy needed some extra funds to be able to stay in her home. She was cutting back on expenses like getting her hair done, cut off her cable TV service, just the little things that can give a person their dignity. When we did the reverse mortgage for her she was able to receive the services that returned her dignity. Lucy was a sweet independent woman that I always enjoyed talking with even after the loan was closed.

Fulfillling dream with a Reverse Mortgage

Fulfilling dream with a Reverse Mortgage

Carol had wanted to see a play in England that was going to end shortly after she had contacted me about doing a reverse mortgage. We closed her reverse mortgage and it was funded on a Wednesday. Thursday she was on a plane to London to fulfill her dream and see the last viewing of the play that Saturday. It gave me great pleasure to be able to help her fulfill her dream.

The reverse mortgage allowed Len to retire so he and Mary could live in their retirement home closer to their children. At the age of 70 Len was still working many hours and it was difficult for him. He and Mary owned two homes (one close to work and the 2nd close to their children) and was continuing to work in order to make the mortgage payments. Doing the reverse mortgage allowed Len to retire because by paying off their current mortgages the mortgage payments were eliminated. Len and Mary are enjoying their retirement living in the home closest to their children as their primary resident, keeping the 2nd home as their vacation home. I talk with them several times each year and they are so relieved and thankful for the reverse mortgage. Their family has also told me the difference I have made in their parent’s life. This situation too warms my heart because of the difference the reverse mortgage has made in their life.

These are just a few of the stories that have warmed my heart – each and every one of my hundreds of clients have touched me in one way. I feel blessed to be able to make a difference in the lives of seniors and help them stay in their home with security, independence, dignity and control.

Read some other articles with additional stories at: “ Reverse Mortgages Help Celebrate Independence;” “Reverse Mortgages Finance Home Care;” “Finance Retirement With A Reverse Mortgage;” “Reverse Mortgages Answers Prayers;” and “Know A Senior Who Wants Security, Independence, Dignity And Control? A Reverse Mortgage May Be the Answer!”

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Looking To Relieve Caregiver Stress? A Reverse Mortgage May Be The Answer!

Posted on December 22, 2009 by Beth Paterson, CRMP

Are you a caregiver, one who is taking care of a loved one? And as a caregiver are you also balancing your career, family, home and life activities? Are you stressed from all of this? Are you overwhelmed at trying to handle everything and find options to help your loved one?

When taking care of your loved one are you wishing you could focus on being the child or spouse instead of paying the bills, managing the budget, preparing the meals, ensuring their needs are met, medicines are taken, managing the household or being the nurse? Are you trying to finance their needs along with your own? Are you wishing you could just sit and visit, read to them, go for a walk, go out for a relaxing lunch, or go shopping instead of dealing with everything else?

A reverse mortgage may be the answer to help you. With a reverse mortgage you can reduce your stress and hire the assistance from a care manager, companion service, home care agency, daily money manager and/or find services to help with the yard and household chores. With the services you can return to your role of child or spouse and do the things you enjoy doing with your loved one.

A reverse mortgage is a mortgage with special terms for senior homeowners 62 and older that allows seniors to remain in their home with security, independence, dignity and control. The advantage for seniors is that there are no income or credit score qualifications and there are no monthly payment requirements. The borrowers keep the title to the home and are responsible for taxes, insurance, and maintaining the home. Unlike a conventional loan the low-interest accrues, increasing the balance with no payments due until the home is no longer the primary residence of the borrowers. In addition, the reverse mortgage is a non-recourse loan which means there is no personal liability to the borrowers or their heirs for repayment if they our their heirs are not retaining ownership. When there is remaining equity at the time of sale the funds go to the borrowers or their heirs.

The funds can be used for any purpose, whatever the needs or wants of the seniors. The advantage to you, the caregiver, is that funds would be available to get the services to help your loved one so they can remain in their home and not depend on you and you can enjoy your time with them rather than being the nurse, the money manger, the cook, the yard worker, etc..

Some of the resources available to assist you include:

A care manager who is a professional such as a social worker or health care professional who can assist you or your family to manage the medical, psychological, and social affairs, through assessments, identifying needs, and then planning, coordinating, and monitoring services and resources to assist you in financial, legal, and housing needs.
Daily Money Managers can assist with day-to-day finances such as paying bills, balancing they checkbook, sorting the mail.
Companion and home care services are services provided in one’s home ranging form companion and basic home chores to medical care such as nursing, occupational, speech, or physical therapy and other medical therapies. Home Health Care providers may hold licences and provide skilled cares which are done by licensed professionals such as a social worker, nurse, or home care aide and can provide personal care and assistance such as activities of daily living like bathing, dressing, grooming, transferring, toileting. Companion oar personal care assistants provide companionship and supervision but cannot provide personal or nursing care. Their services are available from minimal hours to 24 hours and live ins.

So stop being so stressed, look into a reveres mortgage to see if it is right for your loved ones to have the funds for their security, independence, dignity and control. It could be a wonderful present to yourself.

Other Blog articles you may find helpful:

This material may be re-posted provided it is re-posted in its entirety without modifications and includes the contact information, copyright information and the following link: http://wp.me/p4EUZQ-bL

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Having Our Seniors Share Their Memories, Dreams and Desires To Receive Security, Independence, Dignity And Control

Posted on December 9, 2009 by Beth Paterson, CRMP

With the families gathering for the holidays now is a good time to discuss memories, dreams and desires with our senior loved ones. One of the most important things to keep in mind is having an understanding of the senior and considering what they want. As George Santavana stated, “Before you contradict an old man, my fair friend, you should endeavor to understand him.”

Our seniors are valuable to our families and to our society. They are not just a potted plant in the corner that looks beautiful. They bring experience, knowledge, history and a sense of who we are. They have and continue to contribute to our world. While we treasure other things that are old, we often discount our senior’s opinions, needs and desires.

Sister Mary Germma Brunke wrote, “It is the old apple trees that are decked with the loveliest blossoms. It is the ancient redwoods that rise to majestic heights. It is the aged wine that tastes the sweetest. It is ancient coins, stamps and furniture that people seek. It is the old friends that are loved the best. Thank God for the blessings of age and the wisdom, patience and maturity that go with it. Old is wonderful!”

How can we help make “old” wonderful? As you are visiting with your loved ones ask them what they remember about moving into the house they first purchased, what they like about the neighborhood. How do they feel about where they are living now. Have them share memories of their friends from their youth and what they treasure about the friends in their life now. What do they cherish? What has value to them? What’s important to them?

Have your loved ones define security and find out what gives this security to them. From their viewpoint what does it mean to be independent? How do they define dignity in their life? What do they need to feel they still have control and choices in their life?

Listen to them without making judgments. If they repeat the same story several times, look at it as a process or stage they are going through. It doesn’t mean they have dementia, it may just mean that something about that time in their life has a significant impact on their life. Find out the details of that time of their life and what it means to them now.

There’s a wonderful book by David Solie, M.S., P.A., “How to Say It To Seniors: Closing the Communication Gap with Our Elders” that provides insight into understanding and gives great suggestions on how to have the discussions with your loved ones.

As you listen to the answers of your loved ones are you discovering that they want to stay in their home? Are they struggling financially? Do you need a little extra help with chores or getting out to church or visiting with friends or going to a movie? Do they need some physical therapy to help be able to do what they desire? Is nutrition and meals a concern? Would assistance in bathing be helpful?

There are many options available to help seniors meet their needs and desires. If they want to stay in their home and need some extra cash, consider a reverse mortgage. If they need some extra help, a home care agency can help them. Home care agencies provide companion services, meal preparation, medication reminders, bathing and skilled care. Physical therapy can be brought into the home. Adult Day Services are an often overlooked option. And if the family dynamics come into play, a Geriatric Care Manager can help facilitate as well as assist in determining needs and resources.

Reading some of my other blog articles will help provide you and your loved ones with information to help their life to be wonderful:

“Reverse Mortgages Help Celebrate Independence;”

“Know a Senior Who Wants Security, Independence, Dignity, And Control?;”

”Reverse Mortgages Finance Home Care;”

“Finance Retirement With Reverse Mortgages;”

“Be Educated About Your Options of Care and Financing The Care.”

“Aging is not ‘lost youth’ but a new stage of opportunity and strength.” (Betty Friedan) Let’s honor our seniors at this stage of their life with the value they provide to us and with the opportunities available to meet their needs and achieve their desires.

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Be Educated About Your Options of Care and Financing The Care

Posted on November 26, 2009 by Beth Paterson, CRMP

Education and planning are the keys to making decisions especially when it involves care while aging. You need to be proactive and know what resources and options are available. With the education and a plan you have more options and can be proactive rather than reactive.

As Forest Gump said, “Life is like a box of chocolates, you never know what you’re gonna get.” This is especially true for aging. In mid November I was fortunate to participate in and be considered a trusted advisor at the Minnesota Private Duty Home Care Conference, “Keeping Mom and Dad at Home”. During the conference attendees were encouraged to plan the future as they would a trip, looking at what would they put in their suitcase for the journey of aging and be prepared for what isn’t known to happen along the way.

Conference attendees reviewed what is known about seniors and their families. We looked at what is known about seniors:

They underestimate their situations
They don’t want to worry or be a burden to their children
- So seniors don’t tell their children what’s going on
They want their families help
- Families often don’t have the time or the financial means to help
Role reversal is uncomfortable
They are fearful of nursing homes and moving
93% say they want to stay in their home

Then we looked at what we know about the families of seniors:

They want to help
They are busy; they are the sandwich generation dealing with their own family, careers, life
They see changes but don’t know what they mean or what the warning signs are
They may become frustrated with their parents denials
Role reversal is uncomfortable
It’s generally women who are doing the caregiving; Minnesota is #1 in the country for working women.

Consider what’s important to the seniors, what do they want for their journey? It’s important to involve the seniors in the process, the plan, and have them agree with the plan. Discuss their wishes along with what you think is needed. What will provide them their security, independence, dignity and control of their life? Including a mediator and/or trusted advisor is a good idea. If they are resistant to bringing someone else in, discussing their options, or accepting outside help, tell them that they may not need this but that you do.

By being educated and having your plan in place if a crisis occurs means more options will be available along with decreased costs. Being reactive at a time of crisis means less options are available along with greater costs. Emotional and reactive decisions make for poor choices and actions made from regret and guilt.

Part of the education and planning means getting the facts. Unfortunately we have been conditioned to think that seniors will end up in a nursing home; that an assisted living facility provides all the care needed and is often the only option; that home care is short term and the nursing home and/or assisted living is safer than being at home.

We need to recondition our thinking to:

Seniors can live at home indefinitely
Home care can provide a nursing level of care at home
Living at home can be safer; you receive a 1 to 1 ratio of care versus 1.5 or more of care per person
Living at home is affordable

Let’s compare the costs of home care options and assisted living rent and with home care options:

Home Care 1	$1,296/month	3-hour visits, 4 days a week, $27/hour
Home Care 2	$3,024/month	4-hour visits, 7 days a week, $27/hour
Home Care 3	$4,536/month	6-hour visits, 7 days a week, $27/hour
Home Care 4	$8,500/month	24-hour or live in care, one-on-one care, $275/day; includes a live in caregiver and frequent visits from a RN
Assisted Living Rent for 1 person	$2,800/month 1-bedroom$3,200/month 2-bedroom	Care packages range from $300 to $2,700 and would be above and beyond the rent; additional care would be charged per hour by a home care agency; there is an additional charge for a 2^nd person in the apartment
Assisted Living Rent & Home Care 1	$4,096/month	One bedroom apartment, 1 person plus additional care at 3-hour visits, 4 days a week, $27/hour from home care agency
Assisted Living Rent & Home Care 2	$5,824/month	One bedroom apartment, 1 person plus additional care at 4-hour visits, 4 days a week, $27/hour from home care agency
Assisted Living Rent & Home Care 3	$7,336/month	One bedroom apartment, 1 person plus additional care at 4-hour visits, 4 days a week, $27/hour from home care agency
Nursing Home	$6,000 – $12,000/month	Single or double room, level of care and facility amenities

Let’s look at selling and moving into an assisted living vs staying at home with a reverse mortgage:

Details: Home Value $200,000; 80 year old (reverse mortgage funds available will depend on age, older one is more funds available)

	Selling	Staying in home with a Reverse Mortgage
Third Party Closing Costs	$2,211	$2,211
Less Real Estate Agent/RM Origination Fee & FHA Mortgage Insurance Premium	$12,000 (6%)	$8,000 (2% origination + 2% FHA MIP)
Net Proceeds	$185,789	$110,108 in Line of Credit; $862/month tenure-for life; or term payments structured as needed (based on rates of 11/24/09)

Now let’s take the net proceeds and compare living in an Assisted Living to living at home with a reverse mortgage and receiving home care.

Selling and Living in an Assisted Living¹	Living at Home using a Reverse Mortgage²
$185,789 ) $2,800 (rent only) = 5.5 yearsNo remaining equity from home.	No rent or mortgage payment as long as you live in the home as your primary residence³Borrower is still responsible for household maintenance, i.e. taxes, insurance, utilities and stay in your home as long as primary residence (i.e. approximately $755/month for a $200,000 home)May have retained equity depending on how long you stay in the home and the home appreciation. The loan is non-recourse.
$185,789 ) $4,096 (rent and Home Care 1) = 3.7 years No remaining equity from home.	Roof over head; funds to cover home care 1 with term payments from RM = 9.8 years³ Additionally it is likely that there would still be retained equity in the home after the 9.8 years.
$185,789 ) $5,824 (rent and Home Care 2) = 2.6 years No remaining equity from home.	Roof over head; funds to cover Home Care 2 with term payments from RM = 3.33 years³ Additionally it is likely that there would still be retained equity in the home after the 3.33 years.
$185,789 ) $7,336 (rent and Home Care 3) = 2.1 years No remaining equity from home.	Roof over head; funds to cover Home Care 3 with term payments from RM = 2.1 years³Additionally it is likely that there would still be retained equity in the home after the 2.1 years.
Then where will you go?Some assisted living will accept Medical Assistance or other public programs such as Elderly Waiver however your choices may be less.	You can stay in your home and have a roof over your head without rent or mortgage payment even after funds from a reverse mortgage are used.Medical Assistance or other public programs such as Elderly Waiver or Alternative Care can be received even with a reverse mortgage. Reverse mortgage does not impact receiving Medicare or Social Security.

¹These rates do not take into consideration care packages or increases in rent charges so it’s likely that the number of years the net proceeds would cover will be less.

²With the reverse mortgage there is a growth rate factor that is passed along to the borrower.

³This time can be extended if you are receiving Medical Assistance or other public programs such as Elder Waiver, Alternative Care or qualify for Medicare covered Home Care.

You have choices and can have control over where want to live and the care you receive. You have the right to say, I want to stay in my home (or keep my parents in their home). When educated and with a plan for the journey, you will have more choices and life will be easier.

Additional Suggested Reading:

Note: This information and these home care and senior housing figures are reflective of costs in Minnesota and are a compilation provided by the home care agencies at the 2009 Minnesota Private Duty Home Care Conference. They are approximations and can vary by company, agency, facility and geographic area.

Blog posts’ information is current as of date post published, program is subject to change in in the future. Contact us for current information, 651-762-9648.

This site or the information provided is not from, or approved by, HUD, FHA, or any US Government or Agency.

Minnesota Reverse Mortgages SIDAC

Minnesota Reverse Mortgage Information, Facts and News from the Experts Excelling in Service

Tag Archives: Senior Home Care

The Impact Of A Reverse Mortgage On A Community Spouse

Reverse Mortgage Stories To Warm The Heart

Looking To Relieve Caregiver Stress? A Reverse Mortgage May Be The Answer!

Having Our Seniors Share Their Memories, Dreams and Desires To Receive Security, Independence, Dignity And Control

Be Educated About Your Options of Care and Financing The Care