Private financial options for Home Modifications and senior care!
PRIVATE FUNDING OPTIONS FOR HOME ADAPTATIONS
Given that most adaptations are undertaken at a point of pressing need or even crisis . As stated in other pages of this site the grant process is slow and even though some people are eligible the need can sometimes out way the ability to wait for grant approval. In some cases the need to access funds quickly can arise :
- Are not eligible for a grant
- You are eligible for the grant but cannot wait due to an urgent need
- Need substantial adaptations to your home at short notice
- Are planning phased adaptations to your home
As each individual requirement around adaptations is different so too is the ability to finance the works . While most will be in a position to fund some of the smaller works from savings . The larger projects can sometimes need some financial support .
In some cases the requirement may encompass home adaptations and home care provision in the home . While the fair deal scheme , the state sponsored vehicle for funding private nursing home care has been establised , no such scheme exists for senior citizens seeking to fund their ageing in place decision
PRIVATE FUNDING OPTIONS FOR AGEING IN PLACE
Paying for home adaptations or senior care can be a challenge for many families. While some families have the means to pay for home adaptations and in home care support for an extended period with their income or savings, other families may need to consider leveraging assets or pooling their combined resources. Many families will use a hybrid of these methods.
Depending on the scale of you adaptation there are a number of ways you can seek to fund your decision and while traditional banks, local credit unions are a great source of support we have provided 2 other popular avenues that you may wish to explore.
Spry Finance is part of the Irish-owned Seniors Money International group, with over fifteen years’ experience of providing Lifetime Loans to customers across the globe, including in Ireland, Spain, Australia and New Zealand
Spry finance offer Lifetime Loans designed primarily to release funds to meet prudent financial needs and objectives in retirement years such as home modifications or care giving .
No other equity release provider anywhere in the world has operated in as many markets as Spry Finance , making them a world-leading expert in this sector.
SEEK PROFESSIONAL ADVICE FROM SECTOR SPECIALIST
Making a financial plan is a way to take charge of your financial future. A financial plan can help you understand your choices and reach your life goals. Financial planning A financial plan looks at where you are nowand where you want to be in the future, and lays out a plan to help you get there.
When you are making a financial plan you will have to think about your long-term needs and about the kinds of things that might happen to you in the future. A financial plan will address a number of different topics, including your:
• Current and future living expenses
• Current and future sources of income,
including government and other benefits
• Assets—their current and future value
• Tax planning
• Insurance needs
Lifetime Loans FAQ
Lifetime loans are a form of ‘equity release’ which enable older people who own their own homes to borrow an amount of money, based on the equity (or value) they have tied up in their home, without having to sell it or move out of it.
A Lifetime Loan is a mortgage loan secured against your home. Unlike a standard mortgage however, there is no requirement to make monthly payments. Instead, the interest is added to the loan balance. This means that the loan balance grows over time. The loan does not become repayable until after the borrower has died or permanently ceased to reside in their own home (the last surviving person where there are two borrowers).
To be eligible for a lifetime loan you must be aged at least 60. If there are two of you, the younger of you must be at least 60. Your home must be your main residence and be of standard construction.
A typical lifetime loan borrower is someone who is ‘asset rich but cash poor’. They have a very valuable asset (their home) but not enough disposable income to fund some specific need that arises in retirement years. According to Spry Finance, the most common use of a lifetime loan is home improvements or related purchases for the home.
A lifetime loan can be a suitable source of finance for someone for whom other options are not available or not attractive (e.g. trading down, taking a conventional loan, a grant, financial support from family, reducing other outgoings).
All this makes lifetime loans a very relevant option worth considering by anyone who wishes to invest in making their home a more suitable place to age in.
This depends on your age and the value of your home. For example a 60 year old can borrow up to 15% of the value of their home whereas a 70 year old could borrow up to 25%. The smallest amount you can borrow is €20,000 and the maximum is €500,000.
At present there is only one lifetime loan provider in Ireland, Spry Finance. The process involves registering with Spry Finance and undergoing their consultation process to establish if a lifetime loan is suitable for your circumstances or not. If so, the application process itself involves an independent property valuation and mandatory independent legal advice from your own solicitor.
There is a set up fee of €1,500 which can be paid up-front or added to the loan. You must also pay your own solicitor’s fees. The interest rate (see www.spryfinance.ie for the latest rate) is fixed for life, removing any uncertainty about the future loan size.
The biggest advantage of a lifetime loan is that it enables you to remain living in your own home, whilst at the same time ‘unlocking’ some of the value that is tied up in your home. You do not sell your home and the lender does not own part of it. Depending on your circumstances, a lifetime loan can be a suitable source of funding to meet a financial need like home refurbishment.
However, anyone considering a lifetime loan needs to consider the following:
- The loan balance will grow in size because no payments are made each month. At an interest rate of 5.5% the loan balance will double in size every 13 years. So if you borrow €50,000 at age 70 for example, the loan balance will be c.€100,000 when you reach age 83.
- Taking out a lifetime loan will mean that you will have less equity in your home in the future than if you did not take out the loan, either to fund future needs or to leave as an inheritance.
- The loan is designed to last for the rest of your life, so the value of your future equity depends on how long you live (the longer you live the larger the loan will become) and the future value of your home, which depends on the property market.
In addition, anyone thinking of a lifetime loan for an aging in the home purpose should also be aware of the following:
- Like any mortgage, the process can take several months to complete.
- At present only a lump sum can be borrowed. This might be suitable for funding a specific purpose like refurbishment costs but there is no option to receive the funds as an income stream, for example to fund home care on an ongoing basis.