Exploring Housing Finances— The Best Options for You

by Michael Siebenaler

Housing and care considerations become important emotional and financial factors as we age. Options when thinking of relocating include renting versus owning, reverse mortgages, and assisted living, as well as other options. 

House owners living in the midwestern United States generally pay less monthly than housing renters. Renting typically involves lower financial risks and provides flexibility if you’re planning to move but likely offers less lifestyle freedom (e.g. pets not allowed, etc.).

Tax Benefits for Homeowners

Housing ownership involves a financial investment which provides tax benefits (e.g. deductions for real estate taxes and mortgage interest) though owners must consider maintenance, insurance, property taxes, and caretaking (while you’re away or if you are unable due to health concerns).

You can check out this online tool for exploring the advantages and disadvantages of renting and owning housing options through aarp.org.

Reverse Mortgages

Owners who have built home equity/value with their investment, can consider reverse mortgages. Reverse mortgages are special home loans that allow periodic or lump sum withdrawals of funds from the home equity/value while the homeowner continues to pay the real estate taxes, utilities, and insurance premiums associated with the home. The reverse mortgage can be 55% to 70% of the total equity in the home (maximum of $625,500). Contact the National Council on Aging at (800) 510-0301 for more information.

Home Equity Loans

Home equity loans (a.k.a. second mortgages) require a monthly payment to reduce principal and interest, while still paying real estate taxes, utilities, and hazard and flood insurance premiums. These differ from reverse mortgages, which do not mandate a monthly payment.

Assisted Living

When considering assisted living housing options, access the type, amount and quality (e.g. required inspections) of care communities that offer and provide.

“Be sure to keep up communication among person(s) living in the community and assisted living staff, care providers, and any others involved,” says Dave Moyer, executive director of Oakleaf Village of Toledo and recent Executive Director of the Year recipient from the Ohio Assisted Living Association.

Assisted living housing (a.k.a. assisted living residences (ALRs) occurs in varied housing facilities where people cannot live alone, but do not require extensive care, typically provided by a nursing home community. Assisted living care typically includes household tasks, transportation, food preparation, bathing/dressing assistance, social planning, special outings, and other activities.

Nursing Home Facilities

“Nursing home facilities are licensed medical facilities in a different classification than assisted living or independent living. Be sure to research any consultants and companies who offer professional planning/services regarding the housing of a loved one(s). Do not wait for a medical emergency. Take action now,” says Moyer.

Remember nursing home facilities are licensed medical facilities in a different classification than assisted living or independent living.

For information please visit http://ltc.ohio.gov/ for information about nursing and assisted living facilties in Ohio.

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