There are few conversations more difficult than trying to decide on a living situation for an elderly relative. When family members reach a point in life where they can no longer make such decisions for themselves entirely on their own, it becomes an awkward position for people who care about them to step into the gap, helping with logistics and other minutia of the decision, possibly including arranging the necessary finances. This is especially fraught if your relative is still going to be living on their own, not yet at a point to necessitate living full time with you or another relative. To help in such situations, here are a few points to keep in mind to guide your discussion.
Talk it through - Of course, the core of this process should be communication. Because you’re looking for a home that your relative can live in on their own, they presumably still have enough of their faculties to be engaged in this process. It will be important to remember then that you will want take your time to do this right, getting their buy in throughout the process. It’s going to be crucial as well that you remember to have a healthy dose of patience as you carry on these conversations. Chances are, this is a relative that’s used to taking care of others, not being taken care of, even partially, by them. This is going to be even more uncomfortable for them if they used to take care of you. Particularly if it’s your parent you’re working with, they may struggle with how much they’re depending on you in this undertaking. Remember too, that the nature of our human experience means that if they raised you as a child, there’s going to be a part of them that struggles with not still seeing you as that child, and it will be even worse. Have patience and understanding, remembering that this is someone you care for, be willing to take a step back and let the two of you have some space in this conversation from time to time.
Accessibility - Once you’ve laid the necessary groundwork, you’ll want to start getting into the brass tacks of choosing a home. Beyond all the things you might normally consider when choosing a home, like the condition of the construction, size of the kitchen, the backyard, or other factors, you’ll want to additionally consider the accessibility of the home for both your relative’s current condition as well as where they might be in a few years. Hopefully, your relative will be around for a good while still, so you want to make sure they’re able to enjoy this home for as long as possible. Some things might occur to your already, like the presence of steps in the home, and what all is available on the first floor if it’s a multilevel home. But also consider things like the width of doorways in the home, both the external and internal ones. If your relative currently uses a wheelchair, walker, or other mobility assistance device, can they get through all the doors of the house with it? Are counters in the home the correct height to be easily reached? Think about how your relative needs to get into the home, from the driveway to the door, is there a clear path they can traverse when needed? Are they able to get to the mailbox or are there crumbling cement steps that will need repaired or replaced? Will you need to invest in ramps to make entry to the home easier? These factors and others will need to be considered.
Proximity to needed services- Does your relative need to visit specific doctors on a regular basis? Is there a pharmacy they need to get their prescriptions from? Identifying how close these locations are will help you identify a home that fits the new type of commute your elderly relative may need. Also, look for places that may offer activities your relative may be interested in. If they like to fish, finding a home with a local park with a pond nearby would be great. Or a library that offers weekly gatherings for crafts or reading discussions. A VFW hall or even just their favorite breakfast restaurant to meet friends for coffee are going to be places you want your relative to still be able to remain active in.
Financial impact - As with any home purchase, the financial impact will need to be carefully considered. This is especially true if you are helping your relative with the purchase. There can be a number of ways to go about this, but they carry with them different types of impact that will need to be taken into account. If you are helping with the downpayment, how are you going about this? Remember that if your relative is applying for a loan to cover the remainder of the home, the bank will likely review their recent statements, and a large deposit like your assistance may affect their decision. Remember as well that if you give a significant amount towards the downpayment, that could have a tax impact on both you and your spouse. Federal law set the annual gift tax exclusion amount to $15,000 for the 2018 tax year, and while the 2019 limit has not yet been set, it’s likely to remain at that same level. You may also decide to simply cosign on the home loan, or take the loan out in your own name. These options have a few benefits, particularly when it comes to determining ownership of the home if your relative should pass away, but they also carry their own difficulties. If you won’t be residing in the home, most lenders have a higher rate for non resident mortgages. Also, this will likely significantly impact your own debt to income ratio if you should need to apply for a loan of your own at some point. Also, if the payments should fall behind for any reason, such as if your relative experiences an illness that prevents them from making regular payments, the delinquent payments will impact your own credit report. Again, each option carries different consequences, and none are really the “right” choice for everyone. Meet with a financial expert if possible to determine which works best for your own situation.
Of course, helping an elderly relative navigate the home buying process is complicated, and there are other factors to keep in mind, but this hopefully will give you a positive place to start. When you are ready to make some of these decisions, call me and I would be absolutely honored to join you and your relative as a partner in this process, offering my expertise and experience to make this as positive of an experience as possible!