CaregivingMinutes™ by Pope Institute

The Best Way to Receive Reverse Mortgage Payments

Since a reverse mortgage is essentially a loan against the money a home owner age 62 and older has already paid into the equity of the home, the income a senior receives from a reverse mortgage loan is tax free. The income (equity buyout) paid to a senior home owner can be received at almost any frequency the borrower prefers. The income payments can be received in installments on a monthly basis, lump sum payments upfront or on regular scheduled intervals, or a combination of payment arrangements.

How you receive your income payments from a reverse mortgage can be affected by many factors. These factors include:
1. Why you need the money. Depending on Why You Think You Need a Reverse Mortgage the urgency of your need may influence the way you receive your money. However, if your home is your only remaining asset consider how drawing out all the available equity at once will affect your long range financial security. When the available reverse mortgage funds/equity is utilized at once, how will your additional care needs be met?

2. If you have other options for financial support. To fully consider what income payment schedule is right for you, first consider all support options for finances, social support, and subsidies for health care needs. After you exhaust all options and have a clear idea of the available financial support and subsidies, you may find you can spread your income payments to increase long-term financial security.

3. Your co-borrowers/owners. If your co-borrowers are financially irresponsible, you may want to reconsider receiving your income payments in a lump sum. Mismanagement of your lump sum income payment may leave you with no resources to fund long-term living needs.

4. You age. Generally speaking, the amount you are eligible to receive from a reverse mortgage is affected by your age, property value, and equity. If you are a younger senior the amount you pull from your equity may be less for several loan procedural reasons and because you may find it wise to draw less of your home value or wait until you are older to start a reverse mortgage loan. The value of your home, reason you need the loan (medical or financial), long-range life plan, and health prognosis should factor into how you choose to receive your income payments.

5. Your money management style and budget. The risk of overspending in the short-term is very high if money management is not a financial strength and a budget is not enforced. Consider drafting a comprehensive and sensible budget to manage your spending patterns. Also consider working with a budgeting professional to enforce accountability.

Copyright 2008 Pope Institute for Health and Education, LLC. All Rights Reserved.

What a Reverse Mortgage Does?

A reverse mortgage is an avenue for additional income for seniors age 62 and older. While the income is far from “free money,” a reverse mortgage does not require any work on the senior’s part. The biggest responsibility for a would-be reverse mortgage borrower is researching the reverse mortgage beforehand and ensure they do not default on the loan.

The income from a reverse mortgage can be used by a senior borrower for any purpose. The mortgage income can help with daily living needs, health and medical care expenses, legal expenses, home management, and paying for other life needs. Key to maximizing the use and purpose of a reverse mortgage is to develop a senior budget to make reverse mortgage income last.

One major talking point in reverse mortgage commercials is paying for the vacation of your dreams. While a trip along the Mediterranean may be affordable after initiating a reverse mortgage, depending on your budget and other financial projections; the trip may cost your more in quality of life than the price paid for transportation and accommodations.

Copyright 2008 Pope Institute for Health and Education, LLC. All rights Reserved.

What are the Types of Reverse Mortgages?

There are essentially two types of reverse mortgages; a reverse mortgage through a federally sponsored program and a reverse mortgage directly through a private lender. Regardless of which type of program you choose (private or federal) both loans are issued through a private lending institution. The loan provisions, safeguards, maximum loan amounts, and requirements to issue a loan distinguish the two programs.

Here’s the difference.

The federal government; through the HUD (Housing and Urban Development) program, issues what is called the HECM loan. HECM stands for Home Equity Conversion Mortgage – it converts your home equity to cash, like all reverse mortgages. A HECM reverse mortgage is essentially a government insured reverse mortgage loan. With the HECM loan the government will pay the remainder of a loan if the value of your home is not enough to repay the reverse mortgage lender in full. The federal government HECM program constitutes about 90% of all reverse mortgages issued.

Proprietary lenders. There are circumstances where working with a proprietary lender is preferable. A proprietyare lender is a reverse mortgage lender/program that issues loans outside of the federal government HECM program. The propriety lender writes the reverse mortgage using similar lending regulatory standards as the federal government’s HECM program with some exceptions on procedure.

Why work with a private reverse mortgage lender?

You may want to work with a private lender to write your reverse mortgage if;
• your home is valued at more than the HECM home value cap of $417,000 (projected for 2008)
• you want to borrow more than $417,000
• or you want to borrow a greater percentage of your home’s value than the HECM loan allows.

Copyright 2008 Pope Institute for Health and Education, LLC. All rights reserved

What is a Reverse Mortgage, Really?

A reverse mortgage is a loan that allows a home owner to convert a portion of the equity in their home to cash.
The loan is specifically designed for senior home owners; age 62 and older. The reverse mortgage program began as a way to help seniors remain in their homes for the long-term. The reverse mortgage is considered a loan because a banking institution agrees to allow a senior home owner to borrow a portion of the equity in their home. A portion of the home equity is paid to the senior borrower in installments, lump sum, or a combination of installment and lump sum payments. The income from a reverse mortgage is not taxable. Learn more about What a Reverse Mortgage Does including the uses and benefits.

Why is the income not taxable? Essentially, because the money you used to build equity and pay for the home was (probably) taxed before it reached your hands; in the form of income from employment or inheritance, for example.

Family members and survivors of the borrowing senior are never obligated to repay the HUD reverse mortgage loan. As long as the heirs and representatives of the borrowing senior are not also named owners of the home, they are not obligate to repay the loan.

A senior does not have to repay the loan until they sell the home, no longer live in the home as their primary residence, or fail to meet borrower obligations in the loan contract.

The borrower obligations include the steps, actions, and expectations a reverse mortgage lender has of the senior borrower in order to approve the loan and keep it current. Because a reverse mortgage lender is only entitled to receive loan repayment in the amount of fees and loan payments made, maintaining the reselling value of the home becomes the means to repay the loan.

Basic Borrower obligations include:
1. A senior must keep current home owners insurance.
2. A senior must live in the home as a primary residence.
3. A senior must remain current on all taxes.
4. Must maintain the home’s physical structure to ensure its value.

Copyright 2008 Pope Institute for Health and Education, LLC. All rights Reserved.

Elder Care Resource: AARP Foundation Grandparent Information Center

Increasingly the number of grandparents who function as primary caregivers to children under age 21 is increasing. Grandparents are increasingly becoming parents to young children. Whether biological parents are removed due to drug use, criminal prosecution, or simple abandonment, grandparents who function as parents have a lot to deal with in caring for a young grandchild. The AARP Foundation Grandparent Information Center is a valuable resource to grandparents who function as parents.

AARP (The American Association of Retired Persons) offers a wealth of information for families and the GIC Local Grandparent Support Database is among its least well-known resources. The database essentially connects grandparents to local third party resources that provide support for the challenges grandparents face as parents.

While AARP does not endorse any of the third party providers in the database, it is a good way to make contact with support groups that may provide respite care, legal assistance, transportation support, and much more. If you are a grandparent functioning as a parent, you can go online to access the support database at www.giclocalsupport.org. The database will direct you to local grandparent support resources and groups in your area.

If you have a question about elder care or need a speaker for an elder care and aging event email us at info@popeinstitute.com.

Remember to visit our homepage at www.popeinstitute.com.

Copyright 2008 Pope Institute for Health and Education, LLC. All rights reserved.

Caregiver Resource: The Society for Progressive Supranuclear Palsy

Supranuclear Palsy (PSP) is a fatal, progressive and degenerative brain disease that has no known cure. Most people have never heard of PSP. I spoke with two women within a matter of weeks in my local practice whose spouses were diagnosed with PSP. Neither of them had previously received information about the existence of the Society for PSP or local support resources for families coping with PSP. The society for PSP is a necessary resource for families managing supranuclear palsy.

If you have PSP or are a caregiver to someone with PSP, please connect with the Society for Progressive Supranuclear Palsy. They will be able to help you connect with support groups in your local area. Due to the progressive nature of PSP, long-term care planning is highly recommended. You can contact The Society for PSP at www.psp.org or by calling them toll-free at (800) 457-4777.

If you have questions about elder care or need a speaker for an elder care and aging event email me at ppope@popeinstitute.com.

Remember to visit our homepage at www.popeinstitute.com.

All the best,
Pamela

Copyright 2008 Pope Institute for Health and Education, LLC. All rights reserved.

Elder Care Resource: Meals on Wheels of America (MOW)

Meals on Wheels Association of America

The Meals on Wheels Association offers delivered meals to seniors who continue to live in the community. The meals are delivered in various frequencies and meet nutritional and some disease specific guidelines. The local programs are often administered through churches, health care organizations and food pantries. To find a Meals on Wheels center go online to www.mowaa.org or call Meals on Wheels at (703) 545-5558 to locate a local meals on wheels provider near you.

When calling to request meal services ask if the provider can accommodate dietary preferences and restrictions. For example, inquire about renal or cardiac diets. I have recommended meals on wheels for many years and it is a great resoure for seniors who are unable to grocery shop, unable to cook, and have limited financial income and support resources to ensure a healthy diet.

If you have questions about elder care, need an elder care speaker, or have a general comment email me at ppope@popeinstitute.com. Remember to visit our home page at www.popeinstitute.com.

All the best,
Pamela

Why Moving in with Your Elderly Parents Might Not Be A Bad Idea

For some, this is the worst idea you’ve ever heard! You may be asking yourself Why in the world would I EVER do that? Frankly, because it could be a win-win situation. Granted, if absence from your family makes the heart grow fonder by all means, let love rule. But, if you have an open and amorous relationship with your elderly parents, even when you see them regularly, moving in might be a good thing. Let me tell you why.

Having a parent move in or vice versa can be best if you are a long-distance caregiver or if one or both of you are struggling to manage the cost of living alone. For caregivers who live long-distance from their aging loved one the cost of travel can be prohibitive. With fuel, food, and care costs rising significantly, having multiple generations in a home has significant benefits. The financial and peace of mind benefits are evident. From the financial side Read the rest of this entry »

Who’s Your Momma?

I am fascinated by many things. Well to be accurate, I’m perplexed by some, awed by others, and for better or worse I’m amazed by the rest. One of the events that I find fascinating is the token celebration. You know- the event/occasion/or person we celebrate on a designated day, week, or month. I can appreciate the merit of having a time of distinction for people, places, and events that have value. Parents, civil rights, secretaries (I mean administrative professionals), and hotdogs (yes there actually is a hotdog day). Truly, I get it-demonstrate value by remembrance and recognition. To be honest, like everybody else, I overeat and buy random presents because I’m supposed to.

More important than the gift or dinner, I enjoy the time spent focusing on the reason for the celebration. It is touching to make others feel special and appreciated. The look on a child’s face when she unveils the masterpiece of her handmade Mother’s Day greeting card is just priceless. The smile of genuine appreciation when singing Happy Birthday to my 65 year old Aunt and celebrating with a Mother’s Day dinner does indeed make the celebration all the more meaningful.

Now that Mother’s Day has come and gone, I’ve had the opportunity to reflect on the many women who have been mother to me - some of them family, some of them patients, some of them neighbors and many of them no longer with us. It is amazing how many fabulous women shape our lives with their deeds of love, pearls of wisdom, and words of encouragement.

One of the most unexpected mothers to me was a patient I Read the rest of this entry »

Caregiver Resources: The American Cancer Society

The American Cancer Society offers free lodging (Hope Houses) when cancer survivors need treatment in another state. A Hope House provides a place for families to live temporarily while a loved one receives cancer treatment. The Society also provides assistance getting insurance even with a cancer diagnosis. Many insurance companies will not approve an insurance policy for a person with a diagnosis of cancer because it is considered a non covered preexisting condition. The ACS works with cancer survivors and their families to get insurance coverage.

The Amercian Cancer Society helpline is available 24/7 including holidays and can be reached by calling (800) 227-2345.

Elder Care Alphabet Soup for the week of May 4, 2008

Everyone in a specialty or professional environment has a particular jargon and terminology that sounds like a foreign language to listeners not familiar with that industry. Financial professions, health care professionals, educators, and legal professionals have industry dialects that confuse even the most enlightened consumers.

Given our focus on elder care and long-term care, every week we provide insight into terms from those industries that can leave people saying “Can you repeat that?”

This week’s alphabet soup is Assisted Living

Assisted Living (A.L./AL)

A supported living environment that provides room and board in addition to personal care support. Some support services are purchased separate from the room and board contract. Assisted living facilities usually provide personal care support for
Activities of Daily Living (ADLs).

Activities of Daily Living (ADLs)

Self care tasks that are performed in day-to-day living. The tasks may be basic (such as grooming and hygiene) or may be more high level such as driving or preparing a meal. You will most often hear your Occupational or Physical Therapist use this term to describe tasks your loved one is or is not able to complete.

Admissions Contract

A legally binding written agreement between an individual and a long-term care provider. The admissions contract will highlight the types, amounts, and prices of care provided in an assisted living facility.

Do you have an elder care term that you would like to share with others? Log in to post a comment or send me an email at info@popeinstitute.com.

If you have questions about elder care, need a speaker for an event, or simply want to say “hello” email me at ppope@popeinstitute.com.

All the best, Pamela

Copyright © 2008 Pope Institute for Health and Education, LLC. All rights reserved.

Redefining Longevity?

In April 2008 the world’s oldest person (Edna Parker born in 1893) turned 115. Can you imagine being 115 years old? I am approaching 40 faster than I can believe and I cannot imagine living to be 115 years of age. Today I was talking with a woman who is 92 years of age. She drives her own car, wears one hearing aide due to mild hearing impairment, does not wear glasses, and lives in a supported living environment. I was telling her about another woman who was approaching 103. Even the 92 year old thought that was old!

To live to be over 100 years of age is truly something. To live to be 115 is incredible and begs the question; How’d she do that? After working in the senior care arena for so long, the word “old” has new definition for me. Seventy is young to me now. I even joke with seniors about 70 not being that old! Really, at 70 years old you’re only 5 years into retirement. During your 80’s you’re getting older. In the 90’s you’re old. And beyond 90, I don’t even know what to say, except “Wow!” Even the “you’re not that old” comment becomes too unbelievable to be funny.

Think about all the changes Read the rest of this entry »

Elder Care Resource: Catholic Charities USA

Catholic Charities provides a broad range of outreach and social support programs that address current regional and national disasters (floods, earthquakes, and wildfires), social support for issues that plague our nation including poverty, and family outreach. Catholic Charities provides low cost and free support services including Private Duty homecare and supervision for elders who are unsafe to be alone. The services offered by each network will vary. To find a Catholic Charities local network in your area visit Catholic Charities online at www.catholiccharitiesusa.org.

If you have questions about elder care or need a speaker for an aging or elder care event email me at ppope@popeinstitute.com. Remember to visit our homepage at www.popeinstitute.com.

All the best,
Pamela

Copyright 2008 Pope Institute for Health and Education, LLC. All rights reserved.

Will the Greatest Nation in the World Please Standup?

I love America. Specifically, I love American ideals and the extent that we Americans are willing to commit our lives, blood, and treasure toward the fulfillment of those ideals for every man, woman and child. Truly, America is great. But, Do you hear what I hear? I hear a chorus; A plea from across the land, it says, “Will the Greatest Nation in the World Please Standup?” We know you’re out there. We know you hear us. Please stand up. Where are you? What are you waiting for? Try as we might, we can’t wait much longer.

You’ve stood up for Read the rest of this entry »

Are You Poorer Than You Think?

If you ask your average middle class senior about applying for Medicaid they would probably say something to the effect that they have plenty of resources. Well…. Maybe they have plenty for having no monthly car note and living in a house bought and paid for 20 years ago. Without a car or mortgage payment, most of us would be doing really well. But, I can assure you, unless you are wealthy, you are not as well off as you think. When I say wealthy, I’m talking multi-hundred thousand dollarnaire at least (in liquid assets). Most retired seniors are a hip fracture, stroke, or heart attack away from the poor house. It’s not the hospital bill that gets you; though, have you seen the cost of a hospital aspirin? It’s not the subsequent rehabilitation stay either. Medicare, which over 42 million people have, will contribute a significant portion to the cost of those services–to a point.

The reason you are poorer than you think is Read the rest of this entry »