ELDER CARE LOANS
ELDER CARE LOANS
There are loans specifically designed to help pay for home care and assisted living. These loans are intended to be used as a bridge until further financing can be secured. For example, while waiting for a home to sell or while waiting to be approved for a veteran’s pension (which can take several years). Read more about loans for elder care.
WHAT IS MEANT BY A BRIDGE LOAN?
Bridge loans are short-term loans that function as financial “bridges” for borrowers until they can gain access to an alternate source of long-term funding. Bridge loans are generally approved quickly to provide cash to those who need it for time-sensitive purposes, such as to cover the costs of care for a senior moving into a retirement community.
IS A BRIDGE LOAN EASY TO GET?
Bridge loans generally require the borrower to have a secure line of equity, a source of income, and assets. Good credit is also needed; however, having several co-borrowers might help offset a borrower’s low credit score. Beyond this, some types of bridge loans are approved more readily by lenders than others. For example, individuals planning on repaying the loan after the sale of a house or with VA pension benefits will find approval much easier than individuals relying on long term care insurance benefits.
WHAT ARE THE COSTS OF A BRIDGE LOAN?
Bridge loans may have application fees and often have origination fees charged by the lender to cover application processing. Most bridge loans are issued as a line of credit, and borrowers will owe interest on the amount of the loan that they use to help cover the costs of their care. However, some assisted living communities will pay the interest on the loan as an incentive for the senior moving into their community. This allows families to borrow money with a bridge loan at virtually no expense.
WHEN ARE THE CONS OF A BRIDGE LOAN?
The largest drawback of a bridge loan is the interest rate of the loan. According to some, it may be considered to be somewhat high. However, this is a relative statement. When compared to a home equity loan, the interest rate might be high, but when compared to a credit card or personal loan, it is very reasonable.
WHAT CAN A BRIDGE LOAN BE USED FOR?
Bridge loans can be used for several purposes. They can cover the costs of moving into assisted living while seniors wait for their home to sell to secure long-term financing. They can also be used to cover the costs of care while veterans and their families wait for the VA to process a pension application and approve benefits.