It is no secret that the United States, along with most of the rest of the world, is going through a recession. These tough economic times are characterized by instability in the stock market as well as the housing market, and this instability extends into jobs and employment. Because many businesses cannot afford much of the overhead costs that they have, they are forced to resort to laying off some of their employees.
Unfortunately, with hard economic times comes a need for more money for the average family as work is scarce and wages are lower. How can you give yourself an added financial cushion to aid you as you reach for retirement in an unstable economy? One very useful option for you could be a reverse mortgage, but, as always, you need to weigh your options and examine the benefits and drawbacks of each option in a poor economy.
Reverse Mortgage Overview
Reverse mortgages essentially allow you to tap into the equity stored in your house that has been built up over a number of years of payments. The major constraint of reverse mortgage is that you have to be a senior (age 62 or older) to be eligible. On top of this, you obviously have to have equity left in your home. You do not, however, have to have your home paid for in its entirety.
This model, while not recession-proof, is readily available in difficult economic times. Many agencies offer both fixed rate and adjustable rate mortgages—fixed rate will lock in the rate offered right now, where adjustable will fluctuate with the market. Because of this, you will have to decide where you think the market will go and make your decision accordingly.
One of the most popular options for making money in the short or long term future is the stock market. While purchasing stocks can be an incredibly quick way to grow your money exponentially, it can also be an incredibly quick way to lose your money exponentially. Stocks are incredibly volatile; while they may look incredibly promising one second, the next second they can just as easily fall apart and place you in a world of difficulty.
Another very common method of getting extra money in difficult economic times is downsizing. This is especially applicable for seniors looking to move into a new home upon retirement. Often, when children move out, seniors are left in homes far too big to live in by themselves. Why struggle with finances to support a home that you do not need and cannot handle on your own?
If downsizing is at all a possibility, it should be looked into. Also before jumping straight into a reverse mortgage, you should carefully comb over all of your expenses and income to make sure you are maximizing your finances and getting the most for your money. If you are still in financial trouble after these steps, then reverse mortgages are most likely your best choice. Few alternatives offer the stability and security of reverse mortgages.