If a senior is having difficulty paying their property taxes on a fixed income, a reverse mortgage may be one option. However, older people should be aware of the problems that can arise with such products and should consult a housing counselor before making a final decision.
That’s according to a new column posted on the retired lifestyle website NextAvenue.
While the higher home price appreciation (HPA) is generally a welcome event for older people who have invested in their homes, they could come with higher property taxes that could be inconvenient for a population living in poverty. much of a fixed income.
Nationally, the property tax bill for a single-family home increased 4.4% in 2020, according to ATTOM Data Solutions, ”the column reads. “And realAppeal, which helps people appeal property tax bills, property tax forecasts will increase by about 6.5%, on average, in 2021. “These tax hikes have hit financially vulnerable homeowners the most, including elderly Americans living on fixed incomes, according to Michael Billnitzer, executive director of the ESOP subsidiary of the Benjamin Rose Institute on Aging, based in Cleveland. ”
ESOP (Empowering and Strengthening Ohio’s People) is an organization that specifically addresses the financial needs of older Americans and the unique realities that come with such status. While Social Security benefits are expected to reach record levels this year, even these increases will not be enough in the face of potential property tax increases.
“Here in Cuyahoga County, property taxes have increased an average of 16%,” Billnitzer told NextAvenue. “Seniors, many of whom are already struggling to make ends meet, now face these kinds of big tax increases and find it much harder to afford to age in their homes. “
This reality could eventually push older Americans into despair, which could lead them willfully under the influence of bad actors like crooks, he said.
In terms of what can be done, getting the ‘right’ kind of help (such as a housing counselor approved by the US Department of Housing and Urban Development). [HUD]) and making sure that the property tax bill is not ignored are essential, according to Antoinette Smith, director of the ESOP board.
While a reverse mortgage has the potential to be of benefit to seniors in such situations, proper verification and due diligence by a potential borrower is key to exploring this option, Smith told the outlet.
“[Reverse mortgages] are among the most expensive mortgage products and because interest is added to the loan each month – and homeowners don’t make payments – reverse mortgage balances increase over time, ”the column says. “If a borrower dies, sells their house or moves, the loan becomes due immediately. Smith recommends speaking with a housing advisor before taking out a reverse mortgage and avoiding payday loans altogether.
Read it column at NextAvenue.