--- title: "Paying for In-Home Care - Creating Cash Flow with Innovation" description: "Paying for care is not so simple for retirees living on fixed incomes with finite assets. Let's take a deeper look on how home equity can help pay for your..." url: https://homecare.preview.multisites.ai/paying-for-care/creating-cash-flow/ publisher: HomeCare.com phone: 800-974-3458 start: https://care.homecare.com/?source=homecare.com --- Paying for care # Paying for In-Home Care - Creating Cash Flow with Innovation Published April 24, 20174 min readBy HomeCare.com ![Reverse Mortgage](https://homecare.preview.multisites.ai/_astro/4afde9a3284ab1a1f3997d13961a3e3d-reverse-mortgage.DYByQW-o_Z1sI443.webp) Questions about care for your family? [800-974-3458](tel:+18009743458) Our homes are familiar with a sense of safety and serenity like no other place as we age. Logically, as the need arises for care, it is often best and most cost effective to look no further than our homes to receive care. In-home care has evolved considerably. Today, with the levels of skilled care and the broad array of services that can be brought to you and administered in your home, the question often becomes one of [how do you pay for it](https://homecare.preview.multisites.ai/family-resources/paying-for-care/) and not the availability of care. Paying for care is not so simple for retirees living on fixed incomes with finite assets. If we all knew how long we were going to live and the levels of care we would require in the interim, then it would be a lot easier, but that’s the conundrum. We do know that care in the home offers the best alternatives and least threatening lifestyle adjustments. Now it’s time to get innovative and think about paying for care from the macro level. Most people, when they have expenses or think about care, focus on the binary elements. The simple things like dissipating their savings to pay the bills. When the money runs out and you still need the care, most people will then turn to debt and whatever family help may be available. Some people have [long term care insurance](https://homecare.preview.multisites.ai/paying-for-care/5-long-term-care-myths/) but this doesn’t pay everything and it has its limits. In many cases, there is home equity, but it is locked up in the home and there are limited ways of accessing it short of increasing required monthly payments or outright selling the home. Both of these options carry risk and appear to be self-defeating for retirees. ## Paying for Care with a HECM (Home Equity Conversion Mortgage) Let’s look at how your home equity can help you with a HECM Reverse Mortgage. It’s all directed toward controlling debt and targeting spending levels based on your fixed income that will allow each of us to live within our means and not sacrifice the potential need for care. A government insured reverse mortgage will enable eligible homeowners with sufficient home equity to accomplish two very profound things. First, it will allow you to pay off any forward mortgages and/or home equity lines that currently require monthly principal and interest payments to lenders. This immediately creates increased monthly cash flow for living expenses and literally neutralizes mortgage debt on your income statement. Secondly, a reverse will provide an innovative mechanism with a credit line for tapping additional home equity, as the [need for care](https://care.homecare.com/?source=homecare.com) or emergencies arises, in a safe and secure manner without undue risk or future escalating monthly payments. These two elements will allow you to focus on financial balance and effectively provide leverage so you can better live within your means with your current fixed income and finite assets. That would not be an available option if you were simply moving debt around. ## Funding Options with a HECM Here are the funding options in detail that a Reverse Mortgage credit line will offer for funding care: Step 1: Paying off existing mortgages at closing. This will effectively swap out an existing mortgage that requires a forward payment and seamlessly replace it with a new deed of trust in the form of a reverse mortgage that does not require a monthly principal and interest payment to your lender. The money that previously would have been required to pay the mortgage is now available for expenses and care. It’s still your home but now you have more cash available. Step 2: Select your secondary funding options: - Credit Line feature. After Step 1, a credit line can be tailored for your remaining available home equity. This is a unique credit line that provides annual growth in your available credit. The untapped portion of your available home equity will actually grow and compound at approximately 5-6% annually. This credit line is an integral part of the reverse mortgage deed of trust. There are no payments due monthly and it cannot be capped or taken away like a traditional bank credit line. Try comparing this to a bank CD. - Term Payment Option: This is another means, in lieu of the credit line, of configuring your available home equity after Step 1. As an example, a five or a ten year term payment may be an attractive option if you feel this time frame is the most important for your care requirements. This will provide you higher monthly advances as compared to a life expectancy time table. - Tenured Payment Option: This is yet another means, in lieu of the credit line, of configuring your available home equity after Step 1. This option is quite unique in that it will cast an annuity-like payment for the rest of your life and the life of your surviving spouse no matter how long you live. These funds can be used to supplement retirement income and pay for care. The options for in-home care have truly graduated to an impressive level in today’s world. A Reverse Mortgage can be a nice compliment to help you find safe leverage within your retirement plan and help you pay for these various levels of care. This article was first published on HomeCare.com on April 24, 2017. Program rules and costs change; see our [current cost data](https://homecare.preview.multisites.ai/cost-of-home-care/) and [guides](https://homecare.preview.multisites.ai/guides/) for up-to-date figures. ## Terms in this article - [Reverse mortgage](https://homecare.preview.multisites.ai/glossary/reverse-mortgage/) - [Home care](https://homecare.preview.multisites.ai/glossary/home-care/) ## Keep reading - [**Paying for Home Care**Can you use Medicare for home care? How are veteran’s benefits determined? Learn the costs of elder care services and home health care pricing including...](https://homecare.preview.multisites.ai/family-resources/paying-for-care/) - [**5 Myths about Long-Term Care**We assembled 5 common misconceptions about long term care, from how much care costs to questions about Medicare and health insurance coverage](https://homecare.preview.multisites.ai/paying-for-care/5-long-term-care-myths/) - [**What 24-Hour and Live-In Home Care Really Cost**At the national median of $35 an hour, round-the-clock care by shifts works out to an estimated $840 a day, $5,880 a week and about $25,550 a month. Live-in...](https://homecare.preview.multisites.ai/guides/24-hour-and-live-in-care-cost/) - [**Home Care Agency, Registry or Private Caregiver: Who Employs Whom and Who Is Liable**The three models differ mainly in who employs the caregiver. With an agency, the caregiver usually works for the agency. With a registry, you usually hire...](https://homecare.preview.multisites.ai/guides/agency-vs-registry-vs-private-caregiver/) - [**Companion Care vs Personal Care: What Each Level Does and Does Not Do**Companion care gives company, light housekeeping, meals, rides and reminders. Personal care adds hands-on help with bathing, toileting, dressing and moving...](https://homecare.preview.multisites.ai/guides/companion-care-vs-personal-care/) - [**Dementia Care at Home: A Stage-by-Stage Plan for Families**Dementia care at home can work for years if the level of care rises with each stage. Early stage often needs reminders and check-ins. Middle stage needs...](https://homecare.preview.multisites.ai/guides/dementia-care-at-home/) ## Talk to a care advisor today. Free consultation. No minimums, no contracts. 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