Senior care can get costly. Even if you strive to be financially prudent your entire life, the cost of care in your senior years can still feel exorbitant. However, one of the most significant things many seniors have is their home, which can help lessen the financial burden of assisted living amongst the Berea, SC independent apartments you’re considering.
Depending on the type of senior care you’re considering and the costs involved, you may wish to turn your home equity into cash to finance the move. Here are the three main options to consider:
Sell Your House
Probably the most obvious option is to sell your home. Selling your property can generate a lump sum that can be used to pay for all of your assisted living expenses for years to come if you live in a city with a healthy real estate market.
The drawback is clear, though: you can no longer enter your house. It might not be a big deal if you require money to relocate to a senior living community. Moreover, you can also bring along some prized possessions during the move to make your new apartment feel like home!
Rent Out Your House
You can hunt for tenants if you’re going into a retirement community and no longer need your home for yourself but aren’t quite ready to let it go. Renters will pay you a fixed sum each month that you can use to pay for senior care costs (and, if applicable, any remaining mortgage balance).
Renters benefit greatly from the fact that, so long as you can maintain a steady stream of tenants, the money will keep flowing in. The drawback is that it requires more work. Landlords have to handle repairs, maintenance problems, and collect unpaid rent. Contacting a property agent to iron out the details for you might be the way to go.
Apply for a Home Equity Loan
A home equity loan, also known as a home equity line of credit (HELOC), is a loan that banks make where the collateral is the borrower’s home. Up to the authorized amount, homeowners may withdraw money all at once or in batches as needed. However, in order for the loan to remain current, you must make monthly payments. You run the danger of facing foreclosure if you start to fall behind.
You can obtain a home equity loan regardless of whether you stay in your current residence, and the costs are typically rather cheap. Because of this, it’s a wonderful option for those who want to keep their house for as long as possible.
How to Know Whether You Should Use Home Equity to Finance Senior Living
When your senior care costs start to mount and you run out of other options, utilizing the equity in your home could be your only option. But be sure to think carefully about which option is best for you and your family.
Consider the following:
- Which type of retirement community is ideal for you? Varying types of independent living communities come at different price tags. Additionally, their amenities and floor plans differ. In such cases, it might be helpful to figure out what’s provided at each community and schedule a tour to check out the premises if needed!
- What additional options do you have to help you pay first? You shouldn’t begin by using your house as leverage. Consider alternate payment options first. Do you have long-term care insurance? Medicaid? Before you resort to home equity, another option could be able to satisfy some of your needs.
Financing the move to a retirement community isn’t always easy, but the sense of community and security you’ll get might be well worth the cost!