The realities of aging can mean many things, including the need for an increased level of care. In recent months, you might have noticed that mom is having more trouble getting up and down the stairs of the family home, or perhaps one of your parents has had a fall and needs to move to a skilled nursing facility.
Another scenario could be that you and your wife are still fit and active in your retirement, but are ready to downsize and move to a community that will take the burden of your future care needs off the shoulders of your children.
Families face difficult situations like these every day, and what can make them even harder are the financial realities. Retirement community living can be expensive, and assisted living and skilled care facilities are even more costly. Worst of all is the painful realization that Medicare will not cover most of these kinds of needs. How can you cover the expense of moving when your house isn’t selling, or while you are waiting for Veteran’s Administration or other benefits?
Short Term Cash Needs for Seniors
The short term financial needs of seniors can be addressed in a few ways, but one often overlooked option is to convert your portable luxury assets, like old diamond jewelry or vintage watches, into cash to help with your move. Diamond Estate Jewelry Buyers can help by purchasing your luxury assets outright or by offering a collateral loan to cover your expenses until your house sells. The funds available to you in the form of that old Swiss watch or forgotten diamond jewelry can be used to help in a transition to a new lifestyle, whatever the level of care needed might be. But there are other options to address these specific financial needs, and we’ll do a short overview of them in this article.
Elder Care Line of Credit
One relatively new option for financing elder care is to take out a bridge loan specifically designed with seniors in mind. While typical bridge loans are used to “bridge the gap” in financing that occurs between the time a new home is purchased and the old one sells, the bridge loans developed for elder care are a bit different. In this situation, the bridge loan is used to cover the expenses of moving into a retirement community or assisted care facility until the house sells, other assets are liquidated, or anticipated benefits are realized.
An Elderlife Line of Credit for Senior Living is one such financial option. This loan covers the gap between income and the cost of senior living by paying the difference between monthly income and living expenses directly to one of over 3000 independent communities or assisted-living homes nationwide. These lines of credit are available up to $50,000, and interest rates range from 8.25 to 12.5 percent based on individual financial situations. These loans are usually short term, and normally require repayment within 5 years.
The Elderlife Line of Credit is an unsecured loan, meaning that it is not backed by your home or other assets. Because it is unsecured, a fairly strong credit score is required for approval. But these loans are generally designed to be taken out by entire families, not just mom and dad. Up to six family members can share the risk of the loan, lessening the need for any one family member to have exceptional credit. The more co-borrowers that are listed on the loan, the easier it is to be approved. And these loans have a very fast approval process. Some families can be approved for loans in less than three days.
Because these short term loans are typically made with multiple family members as cosigners, the age and health of the individual in need of care is not a factor in eligibility. Lenders will need to know what other source of income will become available–usually retroactive veteran’s benefits or the sale of a home.
While an interest rate of 12.5 percent might seem high when compared to a home equity loan or first mortgage, these rates are actually lower than the terms you might get by considering the options of last resort (i.e. taking out a personal loan or using a credit card).
Bridge Loans for Continuing Care Retirement Communities
Continuing Care Retirement Communities are a combination of independent living, assisted living, and nursing homes. They offer senior citizens the ability to “age in place,” without making them dependent on family members. Run by private companies, these facilities are designed as a ‘campus,’ with various housing options that offer a “continuum of care” for residents based on individual needs. The assisted living and nursing home elements of CCRCs are usually intended for residents from the associated independent living units.
Continuing Care Retirement Communities are expensive though, and can require upfront payment from $50,000 to $1 million or more. Elderlife Financial Services offers another type of loan product specifically to address the cost of Continuing Care Retirement Communities. This type of bridge loan is secured by real estate or securities, and can have a lower interest rate than the Elderlife Line of Credit. Again, up to six family members can co-sign for the loan, but by doing so they become liable, and their homes or other assets can be put in jeopardy.
When considering these kinds of family financing options, you should be aware of all the risks, including potentially complicated family dynamics. Everyone involved should be well aware of the financial risks, and each family member should feel good about the process as a whole. And don’t forget to consider all your options.
With the assets of up to six family members involved in this kind of bridge loan, it may be more cost effective and less stressful for each family member involved to think about selling some old diamond jewelry or luxury watches as a way to secure needed funds. Diamond Estate Jewelry Buyers can buy your family’s estate jewelry outright, or perhaps a combination of sales and a collateral loan might be the best option for you and your family.
You can receive a free consultation and verbal appraisal of your fine jewelry by contacting Diamond Estate Jewelry Buyers today. Our appraisals & cash offers have absolutely no strings attached and are offered completely free of charge.
Call (858) 454-2200 – Nationwide Customers: Call (800) 956-8505 (Toll Free)
Are you approaching retirement age and wondering about the best way to prepare financially for your golden years? Please check out our article: How to Prepare for Retirement.