Homeowners age 62 and older saw home equity increase by 3.1% to $6.3 trillion!
These older American homeowners sat on $6.3 trillion in total home equity at the end of the first quarter, according to data analytics firm RiskSpan, Inc. That’s up from $6.13 trillion at the end of last year, and a new record.
Why is this good news? Many older adults who want to stay in their own homes as they age, and we know a majority do, may find that the house that was perfect for raising a family, now lacks the features to support aging in place. So instead of moving out, various modifications, such as stairless entryways and wider bathroom doorframes, can be made to accommodate new mobility and accessibility needs.
The housing wealth our seniors have built up in their homes over the years, their home equity, can be used to update the family house into a space for living comfortably and independently for years to come. The end results is that such ones can now “age in place”. For this reason, some seniors plan for this additional expense by tapping into cash reserve or drawing down funds from an annuity or other investments. (A financial move that may not be supported by their financial advisor or estate planner.) However, another option gaining popularity is utilizing the home’s equity by means of a “Senior Home Equity Line of Credit” associated with a reverse mortgage. This type of home improvement, being associated with a real estate loan, in most cases still has tax benefits for the senior.
For more information, feel free to request from me a link to a webinar on this subject sponsored by the American Society on Aging. The theme of the webinar is “Aging in an Age Friendly Home: Managing the Cost of Home Modifications with Home Equity”. This webinar features presentations by Louis Tenenbaum, one of the nation’s leading authorities on aging in place and Todd Brickhouse, an expert on mobility modifications.
Since there are no restrictions on how the loan proceeds from a reverse mortgage line of credit can be spent, these funds may be a versatile tool for homeowners who choose to age in their own home and continue to meet their retirement goals.
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