Advising Reverse Mortgage Borrowers on Aging in Place
For the many seniors who want to age in place, structural upgrades can become essential for living with accessibility and safety.
A commonly promoted use for the Home Equity Conversion Mortgage, these upgrades are something retirees should start planning for sooner than later if staying in their current home is the plan, said Pete Mendenhall, a certified aging in place specialist.
“It’s not just a nicety; it’s a necessity if you’re going to age in place,” Mendenhall, who is also the HECM vice president at the Federal Savings Bank in Connecticut, said.
He said key areas to look at when planning upgrades are where you sleep, how you get into your home, how you bathe, and how you feed yourself.
“How many floors do you have and where are your bedrooms?” he said. “Do we need to think about a stair lift? Outside, do you go down or go up? Even without ambulatory problems, someone can always have balance issues.”
Laurie MacNaughton, a reverse mortgage specialist with Atlantic Coast Mortgage in the suburbs of Washington, D.C., said that most of her clients have already added the “basics – grabbers, comfort-height toilets, bumper-free showers, ramps and waist-high kitchen carts” before they opened their reverse mortgages. But many times, these updates are in need of repair or replacement, and that is where the HECM funds come to their aid.
“Though these would not qualify as true upgrades, the cost of having this work done can be a back-breaker if you’re on a capped income,” she said.
Christina Harmes, assistant manager for C2 Reverse in San Diego, said that many of her clients do not make improvements until an unfortunate incident, like a fall, occurs. To help seniors plan ahead, Harmes gives her borrowers a gift certificate for a home safety assessment for aging in place when they open the HECM, but she is surprised at how few use it.
“Many people really won’t do anything until they are forced to,” she said.
Harmes said one proactive 72-year-old client, who cares for her husband, mother, and brother, used the HECM money to level out a kitchen floor and smooth an uneven transition into the living room. Other common upgrades she sees are grab bars and extra stair rails.
Mendenhall added that many times these upgrades are as much for the ease of a caregiver or spouse as it is for the aging borrower. Because the upgrades can vary widely, prices are hard to predict, Harmes said.
“The upgrades can be pretty inexpensive to a lot,” she said. “For example, stair lifts are not cheap, like $5,000 to $10,000. But little grab bars are pretty inexpensive.”
Mendenhall agreed that pricing is hard to estimate considering all of the variables like the type of upgrade, demolition, rebuilding, labor and parts. For instance, a webinar sponsored by the National Reverse Mortgage Lenders Association last year estimated a bathroom upgrade at anywhere from $17,000 to $25,000, depending on prevailing local construction costs.
“It always seems to be more than you would have thought,” he said.
No matter what the upgrade is, Mendenhall recommends his clients implement “universal design” so that the senior homeowner can comfortably live in the home while preventing it from being too institutional for the next homeowners. Just this week, the Wall Street Journal featured several such designs in a piece that positioned aging in place as a cheaper alternative to moving into an assisted living facility — including a spa-like bathroom and a remodeled kitchen with wide berths for wheelchairs.
“You wouldn’t notice any of these features unless they were pointed out,” homeowner Kevin Weldon told the Journal. “People don’t say, ‘Oh, you built this so you can bring in a wheelchair.’ They come into the kitchen and say, ‘Wow!’”