AHA Home Tip

The aging of America is accelerating but are we prepared for it? Nationally, the number of elderly people is expected to balloon from 34 million today to about 70 million by 2030. That's going to put pressure on senior housing and our ability to pay for it.

"Fortunately, seniors have more housing options today than in years past," says Richard Roll, president of American Homeowners Association (AHA), "But seniors and their families are well advised to start planning ahead for the transition, and to use caution when converting home equity."

A recent study by the National Council on Aging and John Hancock Mutual Life Co. found that nearly half of 1,000 adults surveyed had done little or no thinking about long-term care. Don't let fear or negative preconceptions about senior citizens' homes stop you from considering your options.

Fortunately, the long-term care industry is recognizing that people want different levels of care, in a variety of housing situations. Senior communities now offer stages of care, starting with private apartments, with the option of moving up to assisted living, and full nursing care. Companies also offer services tailored to assisting seniors at home, including hospice care, nursing, housekeeping, and other options.

Various plans allow you to finance long-term care, including home equity conversion. A reverse mortgage is a loan that actually involves getting money back from your loan provider to use however you choose. Reverse mortgages are expected to boom over the next five years, particularly among senior citizens.

Be sure to study your financing options carefully and learn to recognize rip-offs. Fannie Mae, the major secondary mortgage company, warns consumers to watch out for the telltale signs of reverse mortgage fraud.

First, know how to recognize pressure sales tactics-- don't let anyone fast-talk you into a reverse mortgage, not even friends or relatives. Second, make sure that payments are made out directly to you--don't sign the money over to anyone else. Third, remember that it's totally up to you how you spend the money--just because you heard about a reverse mortgage program from a long-term care company or an investment firm, doesn't mean you have to purchase their services. Fannie Mae's free brochure on Reverse Mortgages is available by calling (800)732-6643.

For more information on buying, selling or owning a home, go to http://www.ahahome.com, the web site for American Homeowners Association.