Welcome to the latest blog in our series, “Ask the Pros!” If you have questions about unlocking the power of your home equity, navigating the ins and outs of reverse mortgages, or making informed decisions about your financial future, you’re in the right place.
In this series, we tap into insights and expertise directly from our wonderful team at Longbridge Financial who are helping to shape the reverse mortgage industry each day. Our seasoned professionals are committed to fielding common questions, unraveling complexities, and providing invaluable insights to empower you on your financial journey.
Whether you’re a homeowner considering a reverse mortgage, a financial advisor seeking new perspectives, or are simply curious about this unique retirement tool, “Ask the Pros” is your go-to source for reliable insider information. Join us as we explore the nuances of reverse mortgages, debunk myths, and uncover strategies for leveraging home equity in retirement.
Our next featured “pro” gives us an inside look at how you can use a reverse mortgage to support multigenerational living! Meet Tara Ballman, Aging in Place Business Development Manager at Longbridge Financial. She’s passionate about all things “Aging in Place” and has authored five books and co-hosted radio shows and podcasts on retirement and aging issues. We sat down with Tara to learn about how reverse mortgages can help fund age-related home renovations, alleviate financial strain, and enhance the living experience for multigenerational households. Let’s dive into the Q&A!
Q: How can reverse mortgage proceeds be used to adapt or renovate a home for multi-generational families?
A: Reverse mortgages offer a unique financial solution that can allow homeowners to tap into their home equity without adding a monthly bill to the mix so long as they meet their loan obligations, keeping current with property taxes, insurance, and maintenance.. For multigenerational households, this option can be a game-changer—providing extra funds to renovate and adapt a home to better suit multiple generations living under one roof.
Multigenerational living—where multiple generations of a family share a single household—has surged in popularity in recent years. In fact, the number of Americans in multigenerational households skyrocketed by 271% from 2011 to 2021, and as of 2023, over 66.7 million adults (more than 1 in 4 Americans) are living this way.1 And with more than 70% planning to continue this lifestyle long-term, adapting homes for comfort and functionality is becoming increasingly important.1
In my experience, a big key to successful multigen living is balancing privacy while still fostering connection and togetherness—and that balance is where money from a reverse mortgage can have a major impact. Funds from a reverse mortgage can be used however you like, and that includes making multigen friendly home projects to create separate living spaces, like basement apartments or garage conversions. And adding soundproofing between shared and private spaces can go a long way toward keeping the peace.
Funds can also go toward home modifications that support accessibility, making life easier and safer, ensuring the home remains comfortable for all ages. Think slip-resistant flooring, no-threshold showers, grab bars, and wider hallways to improve mobility and prevent falls.
Another place where reverse mortgage proceeds can go a long way is the kitchen. Multi-level workstations can allow family members of all mobility levels to cook together, while lowered sinks and stovetops can improve wheelchair accessibility. Adding other options like pull-down shelves can make cabinets easier to navigate, too.
Q: What are some innovative ways reverse mortgages can help alleviate financial strain for multi-generational families?
A: Living in a multigen household allows families to share costs like utilities, groceries, and home maintenance, reducing individual financial burdens. Plus, built-in support for responsibilities like childcare and elder care can also be divided, making life easier for everyone. This living arrangement could be a win-win, strengthening family bonds while keeping expenses manageable.
A reverse mortgage offers several ways to add even greater financial flexibility. Here are some innovative ways families who already have a multigen home or are looking to transition to one can use reverse mortgage funds:
- Set up a growing line of credit2 for unexpected costs, like medical bills, or home modifications.
- Put extra money toward buying a larger home with a Reverse for Purchase
- Turn a duplex or fourplex into a multigen “community,” where family members, caregivers, or even renters can live.
- Help pay for professional caregivers or in-home nurses, so aging loved ones can get the support they need while remaining in the family home.
- Build an ADU or convert a basement/garage into a rental unit to bring in extra income or dedicate extra space to incoming family members. (It’s important to note that laws surrounding ADUs do vary by state. Be sure to talk to an attorney or trusted professional to determine how your state treats ADUs.)
Q: Can you share an example of how a reverse mortgage can successfully support a multi-generational household?
A: Absolutely! Take for example Sarah and Tom, both 72, who decided to welcome their daughter’s family into their home. However, accommodating five people under one roof quickly began to present challenges. While they owned the home outright, limited liquidity made renovations seem out of reach—until they discovered the potential of a reverse mortgage.
With reverse mortgage funds, Sarah and Tom built a 1,000-square-foot, self-contained ADU complete with a kitchenette and accessible bathroom. They rented out the ADU, using the rental income to cover the interest on their reverse mortgage and preserve their home equity for the future.
They also converted a large family room into a comfortable bedroom and living area for their daughter, son-in-law, and grandbaby. These thoughtful updates not only enhanced their home’s functionality but also drastically increased its property value!
The financial benefits were significant, but the emotional rewards were even greater. Sarah cherished the time spent with her grandchildren, while her daughter saved thousands on childcare and rent. This allowed Sarah’s daughter and her husband to focus on their careers and build their savings.
Stories like this are a testament to how reverse mortgages can provide the financial flexibility to create a home that supports everyone’s needs—helping to improve comfort, privacy, and long-term security for families embracing multigen living. Whether used for renovations, caregiving support, or income generation through renting out modified garages or ADUs, a reverse mortgage can be a strategic tool to make multigen living not only feasible but truly rewarding.
Thank you, Tara, for sharing your wealth of knowledge with us!
If you’re interested in learning more about reverse mortgages or want to find out if you qualify, contact our team today. Our reverse mortgage consultants will get to know you and your financial situation to help you determine whether a reverse mortgage is the right fit for you. Empower your financial journey – reach out to Longbridge Financial now to make informed decisions about unlocking the power of your home.
