Using a reverse mortgage after a layoff

With the country’s current economic condition, many people, including seniors, are finding themselves in the unemployment line. While it can be difficult for anybody to obtain a new job, it can be particularly challenging for seniors, as they are forced to compete with many other people for the same position.

The answer for many of our nation’s elderly workers may lie in accessing the equity that has built up in their home. This brings up the topic of risk and how risky it is to obtain a new loan on their home.

For workers 62 and older who have at least 50 percent equity in their home, a reverse mortgage just may be a lifesaver. With a HUD-approved reverse mortgage, homeowners have many options available to them. The most obvious is a reverse mortgage that offers a lump sum or a line of credit. Many think this is not a viable option, fearing income and credit requirements that are usually attached to any type of home loan.

A reverse mortgage in Texas has no income or credit requirements; you are just tapping into your home’s equity. The funds you receive never have to be paid back while you live in the home. Even if the value of your home drops and you find yourself owing more that the property is worth, those with a HUD-approved reverse mortgage do not have to worry. Your heirs will never be saddled with having to pay any money back. HUD will take care of any remaining money owed on the home, and your heirs will get whatever equity is left after the house is sold. Income from your reverse mortgage is also tax-free.

You should be aware that income from a reverse mortgage may affect your ability to qualify for need-based programs like Medicaid.

You can also arrange to have the money held, like an equity line, and you can take it out only when you need it. If you are older than 62, you may be looking at retiring soon, meaning you may need the money even if you are not laid off.