The Covid-19 outbreak has disrupted every sector of the world, be it travel, medical, tourism, and economy. There is no country in the world that is free from the effects of coronavirus pandemic.
The infection affects not only the health of people but also causes a financial crisis in countries. The United States is also suffering from the worse effects of Covid-19, and its fallout affects the financial situation in the country.
But, the good news is that the reverse mortgage in the time of Covid-19 offers the same benefits to seniors. There is no big change with a reverse mortgage that may affect your funds in 2020.
Apply for the reverse mortgage in the time of Covid-19 to live a secure life after retirement.
2021 is the best year to apply for reverse mortgage due to many reasons including rise in home value. You can secure your expenses and can live a happy life with reverse mortgage in the time of Covid-19. Plus, you do not need to repay this loan as long as you live in your home.
Reverse Mortgage funding is still working to meet the needs of senior homeowners. Many offices resume the reverse mortgage process and make contact with borrowers through video calls.
Finance companies have adopted new ways to help seniors with reverse mortgage funding.
Therefore, despite the financial crisis, a reverse mortgage is the only solution that helps seniors with extra funds. So, this is the best time to select a reverse mortgage so that you are able to meet your expenses without any worry in the coming days and years.
Here are the top 5 reasons why seniors should consider a reverse mortgage in the time of Covid-19:
1. Credit Deficiencies Can Reduce Your Options
To qualify for a reverse mortgage, you should have enough funds so that you can pay the property taxes. From 2015, every lender examines the applicant’s credit history very carefully, along with property tax history.
It means you need to fall under the HUD’s definition of “satisfactory” to get qualified for a reverse mortgage.
If you are planning to get a reverse mortgage after two-three years, you might be doing a mistake. Due to Covid-19, things may get costly, and a monthly mortgage payment may rise, which will put the burden on your pocket. And, you may suffer from credit deficiencies in the future, which will make you unqualified for a reverse mortgage.
So now is the best time to apply for a reverse mortgage.
If your age is 62+ and owns a home in the U.S.A, then reverse mortgage is a great choice for you.
You can borrow funds against the value of your home and can receive money as a lump sum, fixed monthly payment, or line of credit. The best part is you do not need to pay any monthly payments as you live in your home.
2. Interest Rates Are Very Low Right Now
There are two types of rates associated with various reverse mortgages. One is long term rates, and the other is short-term rates or interest rates. It is true that you do not need to repay any monthly mortgage payments with a reverse mortgage. But still, interest rates are important to consider.
Fortunately, the interest rates are low these days, and there are two reasons how they are beneficial for reverse mortgages. Take a look!
- When the long term interest rates are low, then lenders offer you a higher percentage of your home’s present value. It means you will get more money for the same home equity, and you can securely hold additional funds in a line-of-credit for future use.
- When short-term interest rates are low, the amounts you get from a reverse mortgage will be at much slower rates.
Therefore, in both cases, the borrower will get benefits from the reverse mortgage. So, it is the right time to apply for the reverse mortgage as interest rates are low in 2020.
3. We Are In A Bear Market And Facing A Recession
For retirees and people above 62, this is not a good time to draw cash from an asset that’s facing a crisis or declining. However, for younger investors, it is good to invest money in the stock market, but for retirees who are pulling cash is not a good time to do so.
In this time of a recession, retirees who pull money are basically selling investments at the lowest rates. But, with a reverse mortgage, this is not the case. Fortunately, the value of the home is stable, for now.
Further, the reverse mortgage funds are tax-free; thus, the home equity can potentially reduce your tax liability as well. Also, it provides you financial well-being in this tough time.
4. Value Of Home Is Still Relatively High
In 2020, the sale of homes in California has decrease by 2%, due to which the value of home remains relatively high. Therefore, this is the best time to tap into your home equity before prices come down.
More home value means you will get more funds from reverse mortgage. As the amount you received through reverse mortgage depends upon the home’s present value. You should not miss the chance to increase your retirement income with reverse mortgage.
Therefore, you should apply for the process as soon as possible. Apart from increasing your retirement income, there are many more benefits of reverse mortgage that you will get in 2020.
5. Great Way To Pay For Unexpected Expenses
A reverse mortgage is a type of home loan which increases your cash flow by tapping into your home equity. You can get the money as a lump-sum amount and can choose to receive monthly payments. The best part is that you can use the cash from a reverse mortgage in any way you want.
With a reverse mortgage, you can buy a new home without draining out your retirement savings in making monthly payments. Further, it is a great option to pay unexpected expenses like medical bills, car repair bills, and more.
A reverse mortgage offers you quick access to cash, which is very helpful in case of any medical emergency. Also, you can use the cash from a reverse mortgage to pay monthly payments for in-home care services until you leave your home.
It allows you to pay for any expenses without making any monthly payments to the lender until you live in your home.
All in all, you should consider reverse mortgage now to get maximum benefits from it.
Conclusion – Reverse mortgage in the time of Covid-19
A reverse mortgage provides great financial security to seniors age 62 and older in the tie of Covid-19. Now, the value of the home is high, and it is the best time to apply for a reverse mortgage. You will get many benefits from this type of home loan and can live a happy life after retirement.
Have you decided to consider a reverse mortgage in the time of Covid-19?
If yes, then you should consult reverse mortgage specialists like Brett. The process of a reverse mortgage could be tricky, and professionals like Brett can help you through the entire process.