Senior Living Line of Credit

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When helping a loved one more to a senior living community, how to pay for the monthly costs is always of concern. Often, families’ are confronted with the issue of how to pay for care until they sell (liquidate) a loved one’s asset such as home or stock or even CDs that need to mature. Before rushing to sell a home at the first low-ball offer, or sell stock when it may be far below a price you find acceptable in today’s down market, take a minute to understand your senior living payment options which include:

1. Senior Living Line of Credit
2. Life Settlements
3. Veterans Benefits
4. Long-term Care Insurance

This article’s focus is on a Senior Living Line of Credit which is increasingly relied upon by families when a loved one moves into a senior living community. Thousands of communities across the country offer and accept this option. A Senior Living Line of Credit offers several unique features to families specifically in a senior living situation, making it a very worthy option especially when compared with what families traditionally had to do: sell a home at a lower than acceptable price because you are in a rush; use credit card cash advance checks which, while they may carry low teaser rates should you make a late payment, that friendly initial rate is now in the high twenty’s and not so friendly; or rely on putting your own home equity at risk without siblings’ support - after all, didn’t mom or dad take care of all of you and if so, why should one sibling carry the cost burden instead of the all siblings coming together to support mom or dad? This line of credit offers several unique features you should ask for:

Benefits of a Senior Living Line of Credit

1. Use only what you need as you need it
2. Smaller monthly payments on funds used while you wait for that house to sell at a good price
3. Typically same day decision with fast funding (24 to 48 hours)
4. Is typically unsecured, requiring no collateral for amounts up to $50,000
5. Up to six persons can join the application so one sibling doesn’t have to carry the entire burden
6. Funds sent directly to the community each month to ensure the line is used for senior living
7. Has flexible repayment terms of three to five years, more than enough time to sell a home
8. Line of Credit documents make it clear this is for mom or dad’s housing and care

Interest rates on these lines of credit tend to be higher than home equities (since they are unsecured) yet lower than credit cards. Usually a one-time origination and support fee is added to the principal (most of these lines are used by families and senior to fund the transition to senior living, and have a life of less than a year, hence the reason for the fee) so be sure to learn the amount of this fee.

Typically adult children may need to co-sign with mom or dad which most families do not find to be an issue because they know an asset will eventually be sold, the proceeds of which will be used to repay the line of credit. Thousands of assisted living and senior living communities across the country offer this growing option, which remarkably, few seniors and adult children know about.

Many communities as an incentive, will offer to cover some or all of your interest so be sure to ask the community you are interested in. We have a car loan, a student loan, a mortgage, which help us segment and keep track of our obligations. Now, a Senior Living Line of Credit can help a family access quality housing and care, keep track of mom or dad’s care expenses, and give your family a little peace of mind.

Article submitted by Elias P. Papasavvas, Founder & CEO of Elderlife Financial Services LLC
www.elderlifefinancial.com.
Helping families access senior living