Reverse Mortgages: The Nursing Home Factor


A reverse mortgage can help you pay for at-home health care, but if you might eventually move to a nursing home, here’s what you need to know.

Whether you considering a reverse mortgage from Wells Fargo (Stock Quote: WFC), MetLife (Stock Quote: MET) or any other lender offering government-insured home equity conversion mortgages, it is important to plan ahead.

Planning Ahead

If you’re expecting to move or be away from your home for more than 12 months at a time for any reason, whether it’s for a permanent move or a temporary stay in a nursing home, medical facility or elsewhere, a reverse mortgage may not be right for you. Consider the closing and other costs involved, for example. 

If you do spend more than 12 months away from your home, your reverse mortgage loan then becomes due in full, according to the U.S. Department of Housing and Urban Development. 

Keep in mind that a senior's average stay in a nursing home is about 2.3 years, according to the Centers for Disease Control and Prevention.  However, many nursing facility stays, for example for inpatient rehabilitation after a stroke, last less than three months, according to the AARP.

Spouses and Primary Residence Rules 

If you’re married and either you or your spouse enters a nursing facility and the other stays at your home, you don’t have to pay back your balance.

Otherwise, the cash you receive from your reverse mortgage, will have to be paid back as soon as your home is no longer considered your primary residence. 

Combining Care

Instead of care at a nursing home, you can opt for home health care which is covered by government benefits like Medicare or Medicaid.

Negotiating with Lenders 

Compromise is possible, as long as you are proactive. If your nursing home stay will be limited, but a few months over the 12 month limit, you may be able to negotiate with your lender to be able to keep your home, according to Peter Bell, president of the National Reverse Mortgage Lenders Association. Contact your lender as soon as you have all your information to see if it is possible.

Related Stories:

Reverse Mortgage: How Much Can You Get?

Your Guide to Reverse Mortgage Counseling

The Basics of a Reverse Mortgage Appraisal

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