Line of credit loan vs selling investments to buy into continuing care
Buying into a CCRC (Continued Care Retirement Community). Closing within next six weeks, but have not sold my current home so will be needing funding to close. Would it be smarter to borrow using my investment account as collateral for a Line of Credit or sell off some investments?
Terry Says
Wait. Are you absolutely SURE you want to “buy in” to this facility? Have you checked their financial resources. I only ask because in recent years, many have had to go through bankruptcy as the “buy-in” funds were used for maintenance. They could not keep their promises to refund the money as promised at death or when a resident moves out.
Read this article from the Wall Street Journal, describing the pitfalls of buying in to a continuing care facility.
Are you sure you couldn’t find a comparable place that does not require a deposit? There are many and you can get help finding them from the Illinois Department on Aging: https://ilaging.illinois.gov/
In the meantime, I would delay doing this contract, if you insist on moving there, until AFTER your home is sold. The housing market is getting softer, as more people have concerns about the economy. I know you don’t want to “lose your place” — but it is better than losing a lot of money. Please use caution here.
