Can Home Equity Be Used For Medical Costs

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When you face high and unexpected medical costs, you may feel at a loss in figuring out what to do to take care of yourself, and your family. The financial stress brought on by medical bills can exacerbate your medical problems and lessen your ability to fight for your health. While you might be struggling with the fear of losing everything you have, if you own your home, you do have options.

Home Refinance Loan

If your home has equity, you can refinance your mortgage loan to get money out of your home’s equity. You can use an online home loan refinancing calculator to see what you can get out of your home and what your new monthly mortgage payments will be. Depending on when you bought your house, you may get a lower interest rate with your new loan. As a borrower, you will need to provide your lender with personal information. For example, they will look at your credit score, current mortgage payment, and income. If you can lengthen the loan term at a lower rate, then you may be able to get money out of your house to pay for your medical bills while also lowering your monthly payment.

There are many different types of mortgage loans, including fixed-rate mortgage and an adjustable-rate mortgage. You may be able to change your current loan structure during the refinance process. As a homeowner, you can look at today’s rates, the refinance calculator, your mortgage insurance, your monthly mortgage payment, and your medical bills to determine what will work best for you and your family.

If the medical expenses you are incurring are ongoing, you may want to look at the long-term ramifications of refinancing your house in light of the medical problems. For example, when caring for someone with Alzheimer’s Disease, the medical needs will be ongoing. Your loved one’s dementia doctor can provide you with more information on what you can expect. Organizations like the Alzheimer’s Association can also provide you with extensive information, support, and resources to help you as a caregiver.

Reverse Mortgage Loan

Another option is a reverse mortgage loan, which will provide the money needed to cover your medical bills, and won’t be due until the homeowner passes away. The family will then have a short period of time to repay the loan, which is typically accomplished by selling the house, or getting a repayment loan until the house can be sold. The reverse mortgage loan company will look at various factors, including your current loan amount, home equity, and credit score, to decide. Once they have an offer prepared, you do not have to accept it if you are unhappy with it. It is important to be upfront with your family members about what you are doing, so they are prepared for the loan to come due, once you pass.

If you want to protect your family from any potential financial burden, you can purchase a life insurance policy in the amount needed to pay off the loan. With a life insurance policy in place and additional information on what the money is to be used for, your family can choose to keep the house or take their time cleaning it out and selling it without having to take on an additional loan.

Life Insurance Buyouts

If you have a life insurance policy in place, some companies will buy your life insurance policy, so that you get the cash that you need upfront to pay your medical bills, and then the money will be repaid through the insurance company after you pass away. While this option may be difficult for some to consider, especially if you know your situation is terminal, it remains a simple process to get the money you need for your medical expenses, and at least provide you with peace of mind that you’re making the right move.