Selling a House to Pay for Senior Living

The decision to move into a senior living community often reflects a desire for a simpler, healthier, more enjoyable way to live, leaving behind the maintenance and safety worries that come with home ownership. Selling a house to help pay for senior living takes care of both.

An Easier Life Awaits

Using proceeds from the sale of a house is one of the most common ways to help pay for senior living. While the decision to move from a house into a community isn’t always an easy one, most find the lifestyle and social opportunities the community offers have a positive impact on their health – and happiness. In fact, many older adults say they’ve become more active after moving from a private residence.
And since they are relieved of the burdens and unexpected costs of things like lawn care, repairs, upkeep and improvements related to changing health needs, they have more time (and energy) to focus on enjoying life fully.

Planning for Your Move

Proceeds from the sale of a house will not only help fund the cost of the community, but they may also cover moving expenses.
Packing up and moving can seem overwhelming – especially for those who may be downsizing for the first time. But it doesn’t have to be. There are many organizations who specialize in helping older adults move. These organizations can help with every step of the moving process, from home staging to downsizing and decluttering to packing, moving and unpacking.

All Real Estate is Local.

Before listing the house, search for a real estate agent who is an expert in your market. Knowledgeable agents can make all the difference in securing the best possible sales price. There are also realtors with Seniors Real Estate Specialist (SRES) who are specially qualified to address real estate needs of older adults.

Quick Sale

A quick sale is an option for those who need to move quickly and do not have the time to make repairs or professionally stage the house. There are senior transition specialists who may be able to make an immediate cash offer on your house. They can inspect the house, conduct a market assessment, evaluate the cost of any needed repairs and then make a quick to ensure fast easy access to funds. Even better, your time can be spent enjoying life in a vibrant community, rather than working on preparing your house for sale.

Loans and Mortgages

For those who may want to lock in during a special community promotion or a personal reason requiring a fast move, a bridge loan – or bridge financing – is a good solution.

Quite simply, bridge loans help families address short-term financial needs. As the name suggests, a bridge loan creates a financial bridge to pay for senior living while waiting for a home to sell or retirement benefits to kick in.

A bridge loan allows you to take advantage of the equity in your home to pay for care. Think of a bridge loan as a home equity line of credit especially for senior living. Many older adults have used bridge loans to give them breathing room and time to prepare and sell their homes for the highest and best price.

How does a bridge loan work?

Apply for an overall line of credit amount.
Draw what’s needed each month to cover monthly service fees and community fees.
Make smaller, interest-only payments on outstanding balance.
Pay back line of credit when proceeds arrive.

Reverse mortgages, based on the equity in your home, can provide you with cash or a line or credit.

How Does a Reverse Mortgage Work? When you apply for a reverse mortgage, lenders evaluate the house’s value, your age and financial situation to determine the loan amount you are eligible for. The loan amount is based on the equity in your home. Funds can be distributed in a lump sum, monthly payments, or as a line of credit.

The home must be the principal residence for at least one person whose name is on the mortgage. So, this type of mortgage is a good option for couples where one partner remains at home while the other moves to senior living for their care needs. When the house is sold, the reverse mortgage is paid back with the proceeds.

To qualify, you must be at least 62, own a house and have some equity in the house. There are a few types of reverse mortgages:

Home Equity Conversion Mortgage (HECM): A great option for those who need to pay for care or home modifications. This reverse mortgage is federally insured by U.S. Department of Housing and Urban Development (HUD). The Federal Housing Administration (FHA) must approve lenders.
A proprietary reverse mortgage is usually provided by private lenders to couples with higher-value properties. Proceeds are paid in one lump sum, as opposed to the HECM, which is paid monthly.
Single-purpose reverse mortgages are usually provided by nonprofit organizations or local governments to help pay for a “single-purpose,” one-time cost, such as real estate taxes or house maintenance.

We advise speaking with a financial professional or elder law attorney experienced at helping families fully understand the options that may help close the gap in paying for senior care.

What if I Don’t Own a Home?

While many older adults utilize the proceeds from the sale of their house to help pay for senior living, there are many other avenues. Lifelog renters can also pay for senior living with sources of income like Social Security, pension, annuities, interest from bank accounts, interest from stocks/bonds, rental income and/or trust funds.

Need More Information on the Cost (and Value) of Senior Living?

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