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New data shows that about 70 percent of American seniors need long-term care. A reverse mortgage, a loan from your house, can help you fund a financial free retirement life. Rawpixel.com/ShutterStock
Someone turning 65 has nearly a 7-in-10 chance of needing long-term care in the future, according to the Department of Health and Human Services, and many don’t have the savings to manage the cost of assisted living. But they may have a mortgage-free home—and the equity in it, giving them the potential option of a reverse mortgage to help cover care costs.
Here’s how to evaluate whether a reverse mortgage might be a good option.
What Is A Reverse Mortgage?
A reverse mortgage is a loan or line of credit on the assessed value of your home. Most reverse mortgages are federally backed Home Equity Conversion Mortgages, or HECMs, which are loans up to a federal limit of $970,800. Homeowners must be 62 years old to apply.
