Many financial analysts have pointed out that the major resource of older homeowners is their home equity. Traditionally, people with fixed incomes were advised to put their equity to work by selling their homes and investing the proceeds. Recently, some innovative ideas for unlocking this source of money without giving up your home have been tried out experimentally in a few localities. These plans are known in the field as home-equity conversion (HEC) plans.
Three different types of HEC plans have evolved from the fundamental idea that equity, converted into cash, can boost buying power and improve quality of life for many older people. The three variations are: reverse mortgage plans, sale-leaseback plans, and special deferred payment loans to upgrade or modify homes.
Renters are, in some ways, a more vulnerable group than owners. This doesn’t mean that all renters are disadvantaged. For some, renting is a highly satisfactory way of life. If you or your parent occupy a rent controlled apartment, you are in a very fortunate position, provided the building is kept in good repair, adequately serviced and secure. However, you may find you are spending a third or more of your income on housing. That’s not so unusual for older renters. But it exceeds the 30 percent of income considered by the federal government a “safe and reasonable” proportion to spend on housing.
Although your building or neighborhood may be showing signs of deterioration, you may still feel a strong attachment to your long time surroundings and don’t really want to leave. What can you
do?
