New data from the American Advisors Group shows that the overwhelming majority of seniors have no plans to sell their homes in old age and have no plans to ever move. 82% of seniors say they want to live in their home for the rest of their life and 92% of seniors said they would rather live their final years in their current home than move to an assisted living or nursing home, according to the report.
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The AAG conducted the âImportance of Home Surveyâ among more than 1,500 participants aged 60 to 75 and found that almost two in three seniors have an emotional attachment to their home and that 50 % of American seniors saw the pandemic as a contributing factor in wanting to live at home stronger.
Nursing homes and assisted living facilities were among the first and most devastating affected during the peak of the COVID-19 pandemic. A stronger desire to stay at home then takes on its full meaning.
“Our studies have shown that the elderly in this country have a strong attachment to their home and the pandemic has only strengthened that bond,” said Martin Lenoir, director of marketing for AAG. âIt’s no secret that many seniors have built up considerable equity in their homes after years of ownership, but what’s interesting is that very few want to sell their homes to get that money. For seniors, the comfort, security and independence of their home trumps the desire to relocate and that is why we see so many older Americans taking an interest in reverse mortgages.
Reverse mortgages are an option offered by banks that, once you have built up substantial equity in a home, allow you to take out a loan against yourself for money. An important warning: it is a very risky thing to do if it is not done correctly. It basically gives the bank back part of your house and in return the bank gives you hard cash.
This can be a great way, IF you’ve paid close to 80% of your home or more, to prepare yourself for cash for the last few years of your life.
Christian Wallace, Head of Real Estate at Better, says: âA reverse mortgage may make sense for seniors who will be staying in their homes for the near future because a reverse mortgage has closing costs and is in the process of being overdue. able to continue paying property taxes. , home insurance and maintenance costs that remain in effect when you take out a reverse mortgage.
While this may be great for some, it’s not a one-size-fits-all solution. Seniors can survive their reverse mortgage and have large bills to pay.
Wallace adds, âA reverse mortgage might not be ideal if you plan to move out as soon as the loan matures, if you can’t afford closing costs and outstanding property taxes, insurance and the interview, or if you plan to pass your house on to an heir, as he or she will have to repay the existing loan. “
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This article originally appeared on GOBankingRates.com: 80% of seniors don’t sell their homes – here’s the financial strategy they use instead