dcsimg
 

Reverse Mortgages and Health Care Costs

October 13, 2009

By Andrew Freiburghouse | Money Rates Columnist

We have blogged before about the increasing popularity of reverse mortages. Reverse mortgages allow homeowners to be paid out the equity in their homes through a lump sum or a monthly payment.

Instead of making a house payment, your house makes you a payment.

The most common form of reverse mortgage, insured by the U.S. government and called an HECM, has been drastically rising in terms of the numbers of loans funded--7,781 in 2002 versus 55,659 in 2006.

As we look out on the future of the reverse mortgage product, those numbers could skyrocket yet more as the Baby Boom generation ages and faces significant health care costs.

The Aging of America

Doomsday prophets such as Robert Samuelson of the Washington Post are predicting that health care costs over the next decades will cripple America economically if nothing effective is done to address the issue.

Meanwhile, Congress has hotly debated the health care issue all summer, with seemingly little widespread agreement taking hold.

Cost of Long-Term Care High and Rising

View this study showing the cost of long-term care in 2009.

With costs like those, it's understandable why long-term care insurance is selling well. But not everyone can afford long-term insurance.

A reverse mortgage is therefore a great option to have, even if you don't choose to use it.

Your responses to ‘Reverse Mortgages and Health Care Costs’

Showing 0 comments | Add your comment
Add your comment
(required)
(will not be published, required)