What Is a Bridge Loan for Senior Living?
When our senior loved ones’ health starts to decline, it may be difficult for them to continue living on their own. Family may want to consider moving their loved one to an assisted living community to guarantee their health and well-being.
Moving an aging parent or loved one is never an easy choice, but it brings peace of mind knowing your loved ones are in a safe living environment with help just a step away.
Not everyone plans for the cost of long-term healthcare as we age, and your senior loved one may be concerned about the high cost of moving to an assisted living facility. Maybe there aren’t enough funds to cover the payments. Fortunately, there are financing options available to help with the cost of living. BridgeWater Assisted Living community suggests using a bridge loan as an option to help cover senior living costs.
What Is a Bridge Loan?
A bridge loan for senior living is a way to “bridge” the financial gap that may be caused by moving into a new home while waiting for your existing home to sell or while waiting to qualify for Medicaid and/or ALTCS (Arizona Long-Term Care System). Many times, when an aging loved one needs to move into an assisted living community, time is of the essence, and waiting for a home to sell on the market is not an ideal scenario, as they are in need of immediate care and can’t wait for their home to sell to receive the needed support.
Bridge loans are short-term loans with repayment typically being completed within a 12-month period, though repayment plans can vary by lender. While you may be able to secure a bridge loan through a bank or other lender, some private lenders are specifically focused on services for seniors, such as Elderlife.
Risks of a Bridge Loan
Securing a bridge loan for senior living is a great option; however, it does not come without risk. If your home doesn’t sell before the loan is due, you may be left making payments on your loan while paying your home mortgage and your assisted living fees all at once.
Before choosing a bridge loan as your financing option, it’s always a good idea to check the current housing market to see how long homes are taking to sell. Bridge loans do have interest rates and fees to consider when choosing this option.
How a Bridge Loan Works
You can either use a private lender or a bank to open your bridge loan. You’ll need to first qualify for the loan by providing the bill of sale for your current home and the purchase agreement for your new assisted living home. Once you qualify for your loan, you may use the funds to secure your new assisted living home. The loan is typically for a 12-month period and payments are required soon after securing the loan, with a large balloon payment toward the end of the repayment period.
If your loved one is looking for their next home in an assisted living community, consider contacting BridgeWater Assisted Living community, where the health and safety of our residents is our number one priority.