The Stimulus Package Aiming to Help the Foreclosed Economy Holds out Hope for Seniors
The stimulus package being introduced by President Obama aiming to help the foreclosed economy holds out hope for senior citizens.
Those Americans who have crossed 55 are most susceptible to the economic pressure because they do not have much time at hand to recover losses. For the elders housing is an important issue – especially for those whose incomes are fixed.
The most direct kind of help for the seniors is coming in the form of at a time payment of $250 for nearly 55 million individuals who avail of Supplemental Security Income or Social Security. They are expected to receive it by the end of May. They are free to use the money for anything relating to rent or paying mortgage instalments.
The money will bring relief for the senior owners of houses who spend on an average $571 per month for housing – taxes and utilities. The housing expenses depend largely on the locale of the residence. Thus for many the sum may seem paltry. One out of four elderly persons spend 30% of their monthly earnings on housing related expenses.
The good news is that about 70% of the house owners who have crossed 65 years own their houses totally and are free from mortgage bindings. For others the equity might come to be a blessing that will provide them with another house even after surrendering of the present one.
The stimulus plan increased the loan limits for a reverse mortgage to $625,500 from the previous amount of $417,000. Higher loans means higher monthly remittances for the elders But when the equity drops so too does the amount that they can borrow. When the borrower dies the house is sold by the lender to get back the loaned amount.
Reverse mortgages is not without pitfalls. Experts opine that it should be resorted to as a last option because of high costs and interest.
Apart from reverse mortgages the plan also grants $4 billion toward Public Housing Capital Fund. By this money will be given to public agencies that own or run low-income housing projects. Sadly many of the renters are senior elders.
Renters comprise of one fifth of those above 65 years of age. Over half of these renters are spending 30% (or even more) on their housing expenses according to census.
Another measure that will greatly help the elderly is granting of funds for AARP’s Senior Community Service Employment Program. By it the older workers can avail of training so as to be qualified to enter again the job market.
