Michigan Reverse Mortgage
One benefit of modern medicine is that people are living longer. It’s important to have options to ensure your retirement savings will last and that you can be comfortable during retirement. Many times your house is your largest asset. A reverse mortgage allows you to tap into the equity of your home and pay off bills, help with care or other expenses, access funds later, or all of these. Following is a summary of how a reverse mortgage works.
What Is A Reverse Mortgage?
A reverse mortgage is a special type of home equity loan for homeowners age 62 and older. With a regular mortgage, you pay the bank. With a reverse mortgage, the bank pays you, drawing on the equity that you have in your home.
“Equity” is the difference between the current value of your home and how much you still owe. If approved for a reverse mortgage, you are accessing a portion of your home equity as cash.
In a reverse mortgage, interest is added to the loan balance each month, and the balance grows. Most reverse mortgages today are called Home Equity Conversion Mortgages (HECMs). HECMs are federally insured.
How do I get the money and what can I use it for?
You can get the money in one of four ways: a monthly payment, one lump sum, a line of credit, or any mix of the three mentioned.
The money can be used to supplement retirement income, pay off an existing mortgage and other debt, pay for medical care, prescriptions, in-home care, make home improvements or repairs, travel, or just to save in case you need it.
How is a reverse mortgage repaid?
The difference between a regular mortgage and a reverse mortgage is that you don’t have to make payments on a reverse mortgage. Does that mean a reverse mortgage never has to be repaid? Unfortunately, the answer is “no”. The loan must be repaid when the borrower sells the home, moves out of the home, or dies. Remember, you don’t have to pay back the loan while you live in the home, but you still have to pay taxes, insurance, and maintain the home.
Here are some additional facts about reverse mortgages:
- The older you are, the more you can borrow
- You can never owe more than the fair market value of your home
- Your heirs will not inherit your reverse mortgage debt
- You can refinance your property using a reverse mortgage and eliminate the burden of making a monthly mortgage payment
Reverse Mortgage in Livingston County, Michigan
If you like what you see here, why not contact us for a free consultation to discuss your particular concerns and goals? Many clients say they feel a sense of relief simply discussing “What keeps them awake at night” with us. Ultimately, our goal is to provide you with the peace of mind that comes from having a plan in place for the future. Let’s talk soon.
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Service areas include, but are not limited to Howell, Michigan, Brighton, Pinckney, Hartland, Livingston County, & Clinton Township, Warren, Sterling Heights, Macomb County, MI.