Senior Living: Use your home equity to finance a renovation

By Carina Boucher | Citizens Staff

It’s no secret that these days, housing prices are at a record high. There’s also a shortage of homes for sale. According to the State of the Nation’s Housing Report from Harvard University, the supply of single-family homes for sale had just inched above historic lows from the pandemic in late 2022.¹ Low housing inventory is a problem if you’re helping your parents as they age, or even looking for yourself as you age. You may have been considering moving your parents into a home that would be more suited to their needs, possibly on one level with some design adjustments that are better suited for their current and future needs. Or, you may have been thinking of doing that yourself. So rather than try to find a new home, you can equip theirs (or yours, if they’re going to come live with you) with aging in place renovations. In fact, 61% of homeowners who have lived in their home for more than six years choose to renovate vs. move because it’s more cost effective.² In this article we’ll cover what aging in place is, what you might need to install to make a home more comfortable, and what it might cost.

What is "senior living" remodeling?

Aging in place helps someone continue to live in a home safely, independently, and comfortably, rather than sending them to an assisted living community or trying to find a new home that has the features they need. These senior living improvements also prevent accidents, so that the resident doesn’t have to leave their home or go to a rehabilitation facility. This concept has only been increasing in popularity over the past several years, with the idea being incorporated into a lot of new home builds. Typically, buying a new home costs more than remodeling an existing one. A renovation of your or your parents’ home will not only help meet their new needs, but it can be cheaper than a nursing home or rehab center. According to the National Council on Aging, the monthly median cost of a nursing home in the U.S. is $7,908 for a shared room and $9,034 for a private room,³ so at least $96,000 a year. Home modifications would be a fraction of the annual cost for a nursing home, running you anywhere from $790 to $7,970 (or more). But it’s a one-time cost that will add value to your property.

If you decide to remodel, this can be exciting because you or your parents will love their new home, as they will be more comfortable, get to stay in the home they love, and get some brand-new upgrades out of it. Whether you are renovating their home or your own — to prepare you for your golden years — it’s important to set your budget before you do anything else. Do you have savings put aside you can use? Do you have equity in your home that you can tap into for a home equity line of credit? If you do, this can be a great source of funds, particularly because universal design improvements can increase the value of your home.

You’ll need to make a list of your priorities when it comes to retrofitting. For example, if your loved one is in a wheelchair and they (or you, if they’re moving in) have stairs, a stair lift or an elevator might be your first priority. Once you’ve figured out these “must haves,” you can start searching for a contractor in your area who specializes in home repairs and remodeling for senior citizens.

Considerations for remodeling older homes

There are some obvious (and not-so-obvious) renovations you may need to do to make your home or your parents’ more accessible for them like widening doorways, installing smart-home technologies or a total bathroom remodel that includes converting your tub and shower to a handicap accessible one.

Some other additions (and rough estimates of what they may cost) that you might consider are:

*These numbers are estimates and will vary from state to state.

How can you pay for the remodel?

If you or your loved one don’t have the money to pay for an aging in place remodel and doesn’t want to put it on a credit card, a home equity line of credit, or HELOC, could be a great option for you. Particularly since the interest rate tends to be lower than that of unsecured personal loans or credit cards.

A HELOC is a loan that uses your home as collateral. The amount you can borrow varies from person to person, but it’s typically the value of your home minus any mortgage(s) that you may have. Say you’re approved for a $100,000 HELOC — you don’t need to use all of that at once, like you would for a personal loan or home equity loan. That money is available to you during the draw period, which is typically 10 years. You also only have to make monthly interest payments on the money that you actually borrow, not the entire credit line. You can access your money by writing a check or transferring it via your mobile banking app (if you have one) or online banking, so you can quickly and easily pay your contractor.

The great part about a HELOC is that once you use it to pay for your aging in place remodel, you can use it for other things like debt consolidation, paying for education, or other critical big-ticket purchases you may have to make.

Here through it all

The aging in place remodeling process can be exciting and will help you better prepare for your own future or make your loved one’s home more accommodating. Whether you want to take out a HELOC to pay for your home remodel or just hear what options are best for you and your financial situation, we have plenty of helpful resources to help you make the decision that’s most beneficial to you and your family.

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If you are taking on a renovation project, consolidating high-interest debt or you just want a worry-free getaway, a Citizens HELOC can help you right now. And our home equity specialists are here to help guide you.

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