New York Reverse Mortgage
A reverse mortgage is a loan for homeowners age 62 and older that allows seniors to access a portion of their home’s equity. The loan generally does not become due until the last surviving homeowner permanently moves out of the property or passes away. After the borrower is no longer living in the home, the estate may choose to either repay the balance of the reverse mortgage or sell the home to pay off the balance. Any remaining equity from the sale of the home is inherited by the estate. If the balance of the reverse mortgage loan is greater than what the home sells for the estate is not liable for the difference.
The Council of Senior Centers and Services of New York City, Inc. (CSCS) states that, “The population of older adults living with financial insecurity is growing. The current economic recession, coupled with a dramatic expected increase in adults over the age of 65 by 2030, poses an enormous challenge to seniors’ abilities to remain in their homes and communities. According to the NYC Center for Economic Opportunity, 1 in 3 New Yorkers over the age of 65 live in poverty. CSCS’ landmark Senior Center Study shows that over 40% of older adults attending senior centers have annual household incomes of less than $10,000 and 90% have annual household incomes of less than $30,000.” Based on this study, it’s clear that the needs of many seniors in New York are often not being met.
NBC reports, “A retired single New York resident makes $17,000 each year from pensions, Social Security and other sources of income, according to WOW’s (Wider Opportunities for Women) Economic Security Database. This income, which is below the national average for the elderly, does not come close to the estimated $26,244 required annually if New York seniors were to live comfortably and with economic security.” According to NBC, mortgage payments and rent make up a large portion of seniors’ monthly expenses, and in states such as New York, where housing costs are higher than average, this has become a real financial burden for many struggling seniors. New York seniors are facing an uphill battle as medical and living expenses are increasing.
The New York State Office for the Aging (NYSOFA) serves as an advocate for over 3.7 million New Yorkers ages 60 and up. NYSOFA provides services such as legal assistance, consumer health care information, nutritional care, veteran’s assistance, financial and tax assistance, community programs to assist seniors, caregivers and family members, recreation, housing, energy, transportation and information and services. NYSOFA also has local offices to better serve residents with local resources. If you or someone you know is a senior who is struggling to make ends meet, your local NY State Office for the Aging may be able to offer assistance.
People generally like to stay in their own homes if it is physically and financially possible for them to live independently. Many seniors rely on their retirement income, which is likely to be based on a fixed income which may include pension, Social Security and personal savings. This is often not enough to afford in home care, major medical emergencies, or other unplanned financial strains should the need arise. A reverse mortgage loan may provide the necessary funds for seniors to afford to continue living in their own homes.
For eligible New York homeowners, a reverse mortgage loan could provide the financial assistance to allow them to stay in their own home while affording in home care, medical expenses or to make modifications to their homes for better accessibility. However, the borrower must continue to pay property taxes, homeowner’s insurance and maintain the home according Federal Housing Administration requirements.