Americans are living longer than ever before but they are not planning properly for it. When arranging for retirement health care expenses, most focus on Medicare, supplemental costs and prescription drugs but few factor in the costs of long-term care.
According to some estimates, nearly 70 percent of individuals over 65 will require some form of long-term care in their lifetime. Studies show that the lack of proper planning is not necessarily neglect but rather the worry of not being able to afford such expenses, including long-term care insurance premiums.
Using a reverse mortgage can be a creative way to meet this challenge. By using the equity in their home, those 62 or older can eliminate monthly mortgage payments and receive extra income in the form of a lump sum, monthly payout or a line of credit which will grow over time – and typically doubles within a decade. With this supplemental income, funding longevity and avoiding the stress of paying medical expenses can be eliminated easier than ever.
Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.