Daughter Uses Reverse Mortgage to Get Mother In-Home Care

Katrine Denese, 80, suffers from paranoid schizophrenia and Parkinson's Disease. Yet the last thing her kids want is to have her placed in a nursing home. "My mother's home is her security - she loves it there," said Janet Hayes, one of four children raised by Denese. Ms. Hayes acts as Power of Attorney for her mother.

Though still able to function independently at times, Ms. Denise, nonetheless, requires round-the-clock care because of dementia.

Using money from her mother's pension and Social Security, Hayes has hired caregivers to take care of her mother. "They help with everything - cooking, bathing, cleaning - you name it," she said.

But that level of care requires money - lots of it. Last year, it became clear that Denese's pension and Social Security were no longer going to be sufficient to cover the caregivers' costs.

Hayes initially sought financial assistance through the federal government but quickly hit a dead-end. "I didn't get very far with the government," Hayes added. "They wanted to pick the caregiver, and provide coverage only for eight hours a day. My mom, however, needs care 24-7."

Hayes thought about mortgaging her home to pay for a caregiver but, in the end, chose a reverse mortgage. "I could have gotten a lot more money using a home equity loan but the interest rate was higher and there's a monthly payment to make," she added.

Acting as Power of Attorney for her mother, Hayes obtained a reverse mortgage with a line of credit. "What sold me on the reverse mortgage was that even after my mother exhausts all the money, she still can stay in her home for as long as she needs to," added Hayes.

Using the proceeds from the reverse mortgage, Hayes has hired two caregivers. "One person actually lives with my mom and takes care of all her needs," Hayes said. "A second person comes in once a week to relieve the other, who spends a few hours shopping for groceries and handling other errands."

Paying her mother's prescription drug bill isn't as much a chore as it once was, either. "My mother's prescription drug bill runs about $330 a month, and that's with free samples," said Hayes, "so the reverse mortgage helped out there." Hayes recommends the reverse mortgage to any adult child who has to care for their parent but doesn't have the financial ability to do so. "It has been a life saver for my mother," she added.

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