Reverse Mortgages Offer Financial Options for Seniors Who Wish To Continue Living At Home

If you've been wondering what exactly a reverse mortgage is, how it differs from a home equity loan, and whether or not it could be a good fit for you or your loved ones, read on for some great information from our friend Ray Antonelli, a local expert who has been helping to educate people on the subject of reverse mortgages since 2005.

What Is a Reverse Mortgage?

Many have heard the term "reverse mortgage," but most don't really understand how it works or how it is different from the more commonly used home equity loan option. "It is different from a home equity loan," Ray Antonelli shared. "That's a common misconception. A home equity loan basically is a loan that you typically qualify for just like any other loan. So, that means you have to have good credit and you have to make payments on that loan, and you have to have good income as well to support those payments... and you have to prove all of this to the lender before a home equity loan can be originated."

"A reverse mortgage is a completely different animal," he went on, "because there are never any payments on a reverse mortgage on the part of the senior, and only seniors can qualify for a reverse mortgage. So, they have to be 62 years old or older, they have to be on title on the home--they have to own it in other words, they just can't be renting it--and in addition to that, they have to have paid their mortgage balance down to at least 50% or less of what the appraised value of the property is. So, that's the primary difference between a reverse mortgage and any other type of mortgage that you have on a property, whether its a first mortgage, a second mortgage, or a home equity line of credit or what have you. There [aren't] any payments. The credit on behalf of the borrower doesn't have to be anything special because there's no credit qualifying[.]"

No Payments? How Does That Work?

Sounds almost too good to be true, right? The beauty of it is, though, according to Antonelli, that it is genuinely as simple as it sounds. "Think of a reverse mortgage as a CD, a certificate of deposit," said Ray. "When someone goes to a bank or an insurance company and takes out a certificate of deposit, typically they give the bank or insurance company a sum of money and then the interest on that CD accrues until maturity. Then, the client goes to the bank and can withdraw all the funds, including all of the interest that has been accrued. Basically, the bank is doing the same thing with a reverse mortgage. It's lending money on the equity in the home and it waiting for the payments. There is never any payment due on a reverse mortgage until the home is sold[.]"

Does the Bank Then Own the Home? No.

One of the biggest misconceptions about reverse mortgages that Antonelli hears from seniors is that they fear it means that the bank owns their home in the process. Not so, he assured us: "[Seniors] think that the bank takes over their home, [that] the bank wants their home. The bank doesn't want their home; they just want to be paid back for the loan at some point. The senior is still on title on the home, they're still required to pay the taxes and the insurance and maintain the home. And when it comes time to pay off the mortgage, for whatever reason, it's just a mortgage. Just like any [regular] mortgage that gets paid off when the house gets sold, [a reverse] mortgage gets paid off when the house gets sold, as well, and the heirs [or seniors, if still living] get whatever is left over."

When Is It Time to Consider a Reverse Mortgage?

Who can benefit from a reverse mortgage, and what is the most typical situation that mortgage lenders see? "About 85% of the reverse mortgages I originate," Ray said, "are for seniors who are literally going backwards every month. They're running out of money before the month ends, and they're either attacking their retirement savings or they're going out on their credit cards to meet normal monthly expenses. If they have paid their home off, or at least have paid it down to less than 50% of the appraised value, I can originate a reverse mortgage for them and it basically fixes that problem more or less instantly because it provides them tax-free cash--because this is a loan, it's not income. It's a loan that they can use to pay their monthly living expenses."

What About Social Security? Medicare? Medicaid?

Understanding how financial options such as a reverse mortgage affect other benefits such as Social Security, Medicare, and Medicaid is an ongoing concern for seniors who are exploring their options. "Social Security and Medicare payments are not affected at all by the reverse mortgage proceeds" Antonelli said. "The reverse mortgage proceeds are treated as a loan, so there's no tax implication. [Seniors] don't have to pay taxes on the proceeds of the reverse mortgage because it's loan money. It just doesn't have to be paid back right away, which is what makes it so attractive. Medicaid is a different story. Medicaid is asset based. Even though the funds are a loan, that is an asset of the estate and that would affect Medicaid benefits. So, the senior does need to consult with a CPA or an attorney that specializes in senior financial situations to advise how best to handle that." Typically, however, Medicaid comes more into play when transitioning into an eldercare community or assisted living situation, so that may not apply to many seniors who are interested in a reverse mortgage.

---

Here at HandyPro, we make your well-being our priority. Our interview series goes hand-in-hand with that effort, and we hope you find it helpful! For more information on how we can help you make your home a home for life, visit us at www.StayAtHomeModificationsInc.com or call me (Brian Pritchard) at 216-212-7531.

To consult with Ray Antonelli about a reverse mortgage, you can email him at Ray100@gmail.com or call 216-337-7520.

To listen to the full conversation between Ray and I, please use the player below...


 

Home Care Company Partners with Harvard to Make a Difference

International home care company Right At Home is making a huge difference for elders and adults with disabilities all over the country and the world. The local branch, which serves the Greater Cleveland area, is managed by Shalom Plotkin and Elise Braverman-Plotkin. We had the chance to sit down with Shalom and get a snapshot of the great work he and Right At Home are doing for the community.

"Our goal is to help maximize the quality of life for those we care for. We do that by helping our clients to stay right at home, which is typically where they want to be," Plotkin said. "We provide non-medical, private-duty, private-pay home care. We [offer] companion care, which might be keeping someone safe at night, [or] making sure someone doesn't fall out of bed or wander. We do personal care, which could be anything from helping somebody to have a bath or a shower, or even to look after toileting ... grooming, hygiene. We also do some light housekeeping. It could be turning the laundry over [to us] ... to washing the dishes if people can't stand on their feet too long, or other things to help them stay independent in their homes."

Cutting Re-Hospitalization In Half

Right At Home has statistically reduced the re-hospitalization rate for their clients by 57%. That is a number that deserves our attention! They are currently partnering with the Harvard Medical School to track 20,000 of their clients across the country in an effort to make home care even better and more reliable for everyone. "Were working, for example, to reduce falls," Plotkin said, "which tend to be more frequent in colder weather when there's ice on the ground. We're tracking regional and national trends seasonally. It's a far-reaching study, and [Harvard Medical School is] partnering with us and with the software that we use as a franchise, called ClearCare, so we're able to collect all the data. We know that we're able to reduce hospital readmission rates by 57% because we have it quantified. ... Primarily, we're doing that by talking to people so that they're less lonely and they're more engaged, and that tends to lead to less anxiety, which means less emergency room visits, which means less tests. ... So, just being there, having somebody to be with you, makes a significant difference in reducing the hospitalizations."

Customized Care

Not all clients, Shalom shared, need regular care. Others need around-the-clock support. Right At Home will meet a client's needs exactly where they're at and come up with a customized plan to do so. "What we do is we make a custom care plan and it starts from there. So, I'll go and I'll meet our client in their home, wherever they call home, and it'll be a detailed assessment. After that initial meeting, we put the plan together. We have some of our staff back at the office--some of our nurses--look it over, and then we match up a caregiver. So, we're looking at their interests, at their personalities, at the services that they need, and we can pretty promptly put somebody in place. ... Then we go back and we see, how is that match working? ... We have supervisory visits. We come by periodically to make sure things are going well, make sure the providers are following the specifics of the custom care plan. We talk to our clients frequently, as well as our caregivers."

Shalom went on to describe the process by which caregivers get to know their clients, gauging their interest in things like going out or staying at home, and recognizing that, in some cases, it is just the ability to choose to go out that feels most important to people, whether or not they actually want to go. Often times, people are just looking to connect, from a nice conversation to sharing stories while looking through a photo album. "The caregivers do become almost like family to our clients," Shalom said. "Sometimes those bonds can develop fairly quickly. What our clients like to know, though, is that they don't have a contract. There's no maximum or minimum number of visits or hours. They can choose the schedule that works best for them." From a single hour appointment to help out with bathing, to full-time, day and night companionship, Right At Home tailors their service to the client's needs and wishes.

"It's humble work, but it's very rewarding. We're keeping a lot of people safe at home, wherever they call home. Some of [our clients do], in fact, live in assisted living facilities and we'll look after them there as well if they need a little bit more one-on-one attention to just stay in place. ... Our caregivers love doing this job. They love it. If they [didn't] love it, it would show right away, for example, in our interviews or in our supervisory visits. They have passion to help improve the quality of life for our clients, for those we serve. What that means is that that family has some peace of mind, and that is ... invaluable."

Affordable Service

While the services offered by Right At Home are non-medical and, therefore, non-reimbursable by medical insurance, their rates are extremely competitive and doable for many families at $19.50 per hour for a single caregiver on as an-needed basis and around $10 per hour for a live-in caregiver. Their services are covered by longterm care insurance and some veterans benefits, as well, and they are committed to doing what they can to help people find a way to afford the care they need.

---

Here at HandyPro, we make your well-being our priority. Our interview series goes hand-in-hand with that effort, and we hope you find it helpful! For more information on how we can help you make your home a home for life, visit us at www.StayAtHomeModificationsINC.com, or call me (Brian Pritchard) at 216-212-7531.

If you’d like to learn more about Right At Home, visit www.RightAtHome.net/Cleveland or call Shalom Plotkin at (216) 752-2222.

To enjoy the full audio of our conversation, please use the player below...
 

Aging In Place Professionals - Education & Connection Make Us All Stronger

More and more people are choosing to remain living at home as they age. For the adult children and caregivers, it can be incredibly challenging to take on the hours and hours of research to track down professionals who can support aging seniors in their own homes. Luckily, one local man saw this need through the eyes of his own experience helping his aging parents to remain in their home and set about to create an organization of professionals that could serve others in doing the same. That man is Patrick Manning, and the organization is called Aging In Place Professionals, or AIPP.

"My folks were approaching 90 years old," Patrick shared. "They were living at their own home. My dad was an old sailor during the war, and the captain of the ship, as he reminded us growing up. And he said, 'The only way I'm leaving this house is feet first on a gurney,' and by golly, he got his wish. ... We respected his wishes, as my family had done for generations, in helping our parents live out their lives in their home. And that's basically what aging in place means. It's those that opt to live in their homes for the rest of their life."

Supporting his parents through this time, Patrick found himself doing a lot of research and legwork to find local companies who could help his mom and dad remain safe and comfortable at their home. "I had to access a lot of resources to help my folks age in place," he said. "Anything from companies that do accessibility work to help modify my mom and dad's bathroom ... [to making] sure there was an accessible shower in there so they would have daily hygiene. ... So, I researched the different companies that made accessibility modifications. ... At the end, we also had companion care come in. That's non-medical care. Eventually, we had a nurse come in, so that was medical care, and then we had hospice come in ... as somebody who understood end of life. ... As the need came up to take care of my parents, I realized that there were a lot of resources in the greater Cleveland area, and I knew the demographic so I knew there was a lot of folks out there that needed all this help. That's why I started the Aging In Place Professionals five years ago."

The group exists as a hub for professionals to come together, get to know one another and exchange referrals, get educated on what options are available in the area, and share those options with local seniors. "We bring in an industry expert every month to talk about some aspect of aging in place," Patrick said. "We have speakers come in from the Alzheimer's Association and talk about Alzheimer's and dementia. We had an audiologist come in and talk about hearing. We have people coming in and talking about finances. We had somebody talk about hoarding. All of these [are] different types of situations and issues that seniors are facing. So, we want to, number one, educate our members about that so they can learn more, but also, as they're sitting there with their peers, they can get to know the other professionals that are providing these services. And when they go into their [senior clients'] homes, now they have some information, some education, and are able to identify these other services that the senior may need. ... We're helping them live at home safely and comfortably."

As of this writing, the next scheduled event is Tuesday, April 14th, 2015 at 8:30 A.M. The topic for this event will be Recognizing and Preventing Elder Abuse and the speaker will be Anne Spelic (Director of Community-Based Programs for the Cuyahoga County Division of Senior & Adult Services).

The event will be at Sunrise Senior Living (21600 Detroit Road in Rocky River, OH) and we encourage you to call Patrick at 440-263-6882 with any questions. There are no membership fees, and the group meets monthly.

As always, you can reach me directly at 216-212-7531, by email at Brian.HandyPro@gmail.com or online at www.StayAtHomeModificationsINC.com.

Please enjoy the full audio recording of my conversation with Patrick by clicking the player below...