The unemployment rate has been climbing due to the COVID-19 pandemic that forced many businesses to cut staff or close their doors for good. With this, there comes a special opportunity for those who were on the cusp of retirement, but were laid off, according to Reverse Mortgage Daily
. The publication outlines a report from Money.com, which shows a reverse mortgage can help in a time of hardship, if you fall under this specific category.
Taking out a reverse mortgage at that point would help prevent using your Social Security, digging into existing investments, looking for part-time work, or cutting expenses and gives you the ability to apply for newly expanded unemployment benefits, according to the report.
"If you’ve owned your house for a long time, you probably have substantial equity in it," wrote Money.com columnist Ingrid Case
. "People who are 62 or older can tap that equity in the form of a reverse mortgage. Instead of you making monthly payments to the bank, the bank pays you: a lump sum, monthly payments, or a line of credit that you tap only when you need it."
As a caution, Case pointed out that there are closing costs and interest rates that are typically higher for the product, when compared to standard home loans. Consumers also need to present proof of enough income to pay property taxes, insurance and home maintenance, according to the report.
to read more about how reverse mortgages can help those who have been laid off just before retirement.