Mature homeowners in the USA and other places have been affected significantly by the Covid pandemic and resulting economic restrictions. With global economies slowing dramatically pensions and business ventures have been affected in many sectors. The US government has introduced a number of initiatives to ease the burden for many sectors in the population. Here is a summary of recent initiatives targeted at seniors and homeowners in particular.
Covid-19: Mature Homeowners Turn Negatives into Positives with These Programs
With Covid-19 raging on, older homeowners are facing tough times. However, there are ways to turn these negatives into positives with certain important programs, some reserved for seniors.
The novel coronavirus is a much greater threat to your health if you’re over 50 and especially if you’re over 65. It’s also likely to be a threat to your financial health.
Fortunately, there are some excellent programs out there to help you turn the negative situation of Covid-19 into a positive.
The CARES Act and Seniors
On March 27, U.S. President Donald Trump signed the CARES Act into law. This stimulus program offered financial relief to Americans who had been harmed by the crisis, including one-time stimulus payments in the amount of $1,200 per adult ($2,400 for a married couple filing jointly), plus $500 each per qualifying child.
These payments are phased out with rising incomes, such that an income of $99,000 for a single filer or $198,000 for a married couple is too high to qualify.
The CARES Act also included a special provision for recipients of Social Security, so that people who are Social Security beneficiaries could receive a stimulus check.
Mortgage Relief Programs
If as mature homeowners you still have a mortgage, you may be eligible for a mortgage relief program. Fannie Mae and Freddie Mac were the first to roll out mortgage relief for conventional loans.
That mortgage relief program includes mortgage forbearance for up to 12 months, penalties and late fees being waived on issues covered by a forbearance agreement, no reporting to credit bureaus on issues covered by a forbearance agreement, and loan modifications that may allow you to have the same payment or a lower payment when things return to normal.
Moreover, government-backed loans are also eligible for forbearance. The process entails sending in a letter to your lender asking for forbearance, and explaining that you are going through financial hardship.
But what if you need something more? In fact, there is a program that offers a great deal more relief than either of the options we have discussed so far, and it is called a reverse mortgage.
Are you a mature homeowner age 62 or older? Do you need cash?
If the answer to both questions is yes, a reverse mortgage may be for you.
Reverse mortgages are loans based on the equity in your home. You receive money for your equity, but you get to keep living in your home.
In other words, you’re selling your home, but you get to keep using it for the rest of your life. The change of ownership does not happen until you have passed.
How much money could you make from a reverse mortgage? The answer will depend on a variety of factors.
One factor is the amount of equity you own in your home. You can’t get more than that. However, you can also never be on the hook for more than the total value of your home.
Another factor is how old you are. The older you are, the more money you will be eligible to receive from a reverse mortgage.
Qualifying also means that the property taxes must be current – no liens – and you have to be current on homeowner’s insurance.
If you’re wondering how much you could get through a reverse mortgage, check out this free online reverse mortgage estimator.
A good reverse mortgage will likely pay you far more than any stimulus check ever could. And unlike the stimulus checks, which pay out less the more income you have, a reverse mortgage will actually reward you for the value you have created in your home.
Some reverse mortgages pay off in one lump sum, while others are regular payments. Either way, you’re almost certainly looking at a much greater impact and much better benefits than any mortgage relief program or stimulus check.
Help at hand for mature homeowners
The coronavirus has plunged the world into a strange and scary time. Many people’s financial plans have taken a hit especially those of mature homeowners. However, you can turn these negatives into positives with some or all of the programs we’ve described here.
Beyond doubt, the stimulus checks have helped many Americans who are struggling. And no doubt the mortgage relief programs will do the same for many struggling homeowners.
However, if you want to really enjoy your golden years, a stimulus check or a mortgage relief program likely won’t cut it. A reverse mortgage can help you to supplement your income and benefit from your hard work and the equity you have in your home.
Here’s to your golden years and a good rest of your retirement.