Financial
Access to financial resources
Housing equity is the most important asset for the vast majority of Americans. After much debate, Texas passed legislation to permit reverse mortgages. Under a reverse mortgage, a homeowner borrows against the equity in their house and receives money from a lender. When the individual dies, moves out, or sells the house, the borrower or her estate must repay the loan to keep the house. Reverse mortgages, however, have not proven to be a popular option - less than one percent of qualified homeowners have a reverse mortgage.
Several factors discourage homeowners from taking out reverse mortgages, including the desire to retain ownership of one's home, high closing costs, low borrowing limits, concerns about future medical expenses, and fear of debt. Critics say reverse mortgages are complicated and expensive, including fees that are poorly explained. The obstacles facing lenders include low origination fees, the risk that borrowers will not maintain their homes, regulatory and legal uncertainties, and lack of demand to justify maintaining a staff trained on reverse mortgages.
Older Texans can also avail themselves of tax benefits, including federal income tax relief and property tax exemptions. For example, people 65 and older have higher income thresholds to determine whether they have to file a federal income tax return. They also have a higher standard deduction. Some Texas communities have special homestead exemptions that ease the burden of property taxes. Current state law provides for the freezing of school taxes on the homesteads of older Texans 65 and older. There is no similar provision, however, for other taxing units. Furthermore, tax breaks to older adults could change as demand for services increase.
Some older Texans may need help managing their income. The Texas Money Management Program, sponsored by Family Eldercare in collaboration with AARP, offers daily money management services to low-income older adults and people with disabilities. Money management is a low-cost, less restricted form of assistance that helps people maintain their independence by preventing unnecessary guardianship. The program provides technical assistance, materials and resources for local sponsoring agencies to help them establish money management programs in their own communities.
Currently, there are 12 money management programs covering 24 counties in Texas. Additional programs are in development. Senate Bill 586 (75th Session) established the Guardianship Advisory Board to advise the Texas Health and Human Services Commission on the development of a guardianship plan for the State of Texas.
Updated: November 2, 2007
