As employment options decline and older Americans remain at a heightened risk of developing severe cases of COVID-19 during the global pandemic, a reverse mortgage can be one tool that allows seniors to remain a home, writes U.S. News and World Report in an article published this week.
The article outlines several ways for seniors to remain at home rather than going out to work, including sharing knowledge online and tutoring; freelancing; seeking remote work; renting out space in an owned home; and tapping into home equity.
When it comes to tapping into home equity, U.S. News points to reverse mortgages as one option, for those who qualify and are at least 62 years old. A sale-leaseback is another option, the article notes.
“Homeowners who want to avoid dipping into retirement funds during an economic downturn may find that their house is a source of cash,” the article writes. “However, with home equity lines of credit being suspended by some banks, retirees need to get creative.
“Reverse mortgages are one option for retirees who are at least 62 years old. With a reverse mortgage, a lender makes regular payments to a senior based on the value of their property. Once the homeowner moves or passes away, the loan must be repaid. This typically requires the sale of the property.”