The global population is witnessing a dramatic demographic shift towards an aging population. The Baby Boomers born between 1946 and 1964 are well into retirement age or just hitting their “Golden Years.” As this massive demographic ages, the concept of “Aging in Place” has gained prominence. As individuals grow older, the desire to remain in their homes and maintain independence becomes increasingly more important. In a recent survey by Bankrate, 64% of respondents said they “never plan to move” from their current homes, making it abundantly clear that aging in place is the preferred method of aging overall. One critical element that can help seniors age in place is the matter of home equity.
To afford to age in place, seniors may have to leverage their built-up home equity in the form of a home equity line of credit (HELOC), a reverse mortgage, or other options that allow people to take advantage of their built-up equity.
Equity options
Home equity can be an asset to seniors looking to age in place that is often overlooked. Home equity is the difference between the market value of one’s home and the outstanding mortgage balance. Research shows that approximately 44% of seniors carry a mortgage balance into retirement, but many have homes that are either completely or nearly paid off. This leaves a large amount of equity available for use.
Home equity can be a powerful financial resource to enhance the quality of life for those seeking to age in place. One’s home is often the largest contributor to personal wealth. There are several options available to seniors that utilize their home equity:
HELOC Loan
A HELOC is a revolving line of credit that uses your home as collateral. Rates on HELOC loans can vary by bank and depending on one’s credit fitness. One thing to remember about HELOC loans is their adjustable rate. We live in an era of rate hikes, and the possibility of a rate hike that could cause financial stress must be a factor in one’s decision to take out a HELOC. On the benefit side, a HELOC can supplement retirement income and save seniors money on their taxes.
Reverse Mortgage
You may have seen advertisements for reverse mortgages during your nightly viewings of Jeopardy. What is a reverse mortgage, and how can it help someone age in place? A reverse mortgage allows one to borrow against their home equity tax-free while they remain in the home and while interest accrues. The money from reverse mortgages can be taken as a lump sum or a line of credit, like a HELOC.
Cash-out refinance
Underwritten just like a new mortgage, a cash-out refinance is an option that allows one to take out a loan on a property they already own. It lets people take advantage of built-up equity to get cash in exchange for a larger mortgage. It can be a risky option since it adds time to a mortgage that may have been close to being paid off.

Matt Lucido, Co-Founder of Yardsworth.com
