For some seniors, escaping home maintenance chores by moving into an active adult community is a dream come true, but others long only to stay in their beloved family home as long as possible. A reverse mortgage loan can be the key that unlocks either one of those dreams if you have equity in your home.

Reverse mortgage loans for purchase

For those who prefer to move but are concerned about tying up their savings in a new home, consider taking out a reverse mortgage loan on the new property. Seniors over age 62 can sell their existing home, use the cash from that sale to purchase a new home, then immediately take out a reverse mortgage loan on the new home so they have access to the cash. The closing for both the purchase loan and the reverse mortgage loan can happen simultaneously.

The main requirement for this transaction is sufficient equity in the existing home. For reverse mortgages, the amount you can borrow is determined by your age and home equity.

Reverse mortgage loans for aging-in-place

A recent AARP survey found 86 percent of respondents 45 and older plan to stay in their current residence as long as possible. Seniors who want to stay in their home to be close to friends and family and a lifestyle they enjoy may need to make some adjustments as they age. Home maintenance projects such as cleaning out gutters or mowing the lawn can become difficult or older people, and it may also become more convenient to have a bedroom on the first floor or to add a chairlift on the stairs.

A reverse mortgage allows homeowners to stay in their home until they pass on or decide to sell, provided they maintain the property and pay taxes and insurance.

If you are considering making a major home improvement, you may want to access part of your reverse mortgage or your entire reverse mortgage as a lump sum. If you are concerned about ongoing maintenance expenses, a line of credit or monthly payments may be better. Consult with a reverse mortgage counselor to make sure you choose the best option to meet your needs.

A reverse mortgage will be repaid from the proceeds of the sale of your house. If your home does not have enough equity at the time of the sale, the loss will be absorbed by the lender. You and your heirs are not responsible for any additional payments beyond the value of the property.

Village movement

In addition to financial concerns, many seniors also wonder how they will handle transportation for errands and health care as they age. In many areas, the "village movement" has taken hold, in which residents of a neighborhood gather to plan for mutual support when one of them is in need. The Beacon Hill Village in Boston is one of the best-known villages, which started in 2001. Today there are more than 50 similar villages around the country, with more than 600 in the planning stages, according to an article in The Fiscal Times.

The concept is relatively simple, with seniors joining the village to work together to find solutions for home repair needs, transportation, grocery shopping - anything that can become difficult for someone who is frail or ill. Some villages charge annual dues, while others are free to join. Some rely on paid staff to coordinate efforts, while others rely on volunteers. Some are connected with a health care facility.

If you are considering staying in your home as you age, ask your local hospital or community center if there is a village in operation or in the planning stages in your area. It could be a solution that will help you stay connected to your neighbors, healthy and comfortable for a long, long time.

Michele Lerner

Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance and business. Her clients include The Washington Times, Urban Land Magazine, NAREIT's Real Estate Portfolio, and numerous Realtor association publications. Michele's first book, "HOMEBUYING: Tough Times, First Time, Any Time" is available now at Amazon.com or from www.MicheleLerner.com.

Next: Can a reverse mortgage ease your retirement fears? >>>