Forbes: Consider Reverse Mortgages After Coronavirus Crash
In terms of its financial impact and implications, no market, investor or consumer has been spared the effects of the COVID-19 coronavirus pandemic. However, there are still some opportunities that can be taken advantage of in the midst of this particularly turbulent climate, according to financial columnist and author Eric Brotman in a new column at Forbes. One such opportunity could be a reverse mortgage.
“While we’re encouraging everyone to be patient and avoid panic-selling everything and knee-jerk reactions, there are a few ways you can take advantage of the current state of the market and create opportunities for your financial future,” Brotman writes.
One such way someone may be able to take advantage of the current situation is through the consideration of a reverse mortgage or cash-out mortgage, he says.
“Property values and appraisals are still relatively high across the country,” he says. “If we are heading into a global recession, housing prices will fall and you will not have the same access to your equity. This is a good time to lower your bills, or potentially consider a cash-out refinance to secure cash on the sidelines.”
For older homeowners, a more viable opportunity is a reverse mortgage.
“If you are retired or contemplating retiring soon and need equity from your home, this could be a good time to do a reverse mortgage,” Brotman says. “These may be available if the youngest person on the deed of your primary residence is at least age 62.”
However, there are a lot of particular nuances to either of these recommendations, so homeowners contemplating them should reach out to an advising professional before making a commitment, he says.
“These strategies are certainly not for everyone, so talk to your financial advisor or mortgage broker to guide you through the pros and cons.”
Other possible considerations in the current climate can be converting to a Roth account, taking a cash withdrawal from a line of credit or talking to a financial planner without actually spending the additional money to make a solid financial plan in these quickly-evolving circumstances.
“While the local news may be focusing on a lot of negatives in the world today, it’s important to find the positives,” Brotman says. “Low tax rates, smaller balances and high home values can lead to opportunities that may position you well once this crisis ends.”
Article by Chris Clow on reversemortgagedaily.com