What is a Reverse Mortgage?
A Reverse Mortgage is a home loan for seniors, age 62 or older, where they are able to use the equity in their home to get cash income and have the security of not having to pay monthly mortgage payments back.
In the past, Reverse Mortgages were viewed in a negative light. That’s changing! There are many benefits to a Reverse Mortgage that consumers are unaware of.
How can a Reverse Mortgage help you achieve financial freedom?
- Improve your monthly cash flow.
- Payoff medical bills, auto loans and credit card debt.
- Make home improvements (to modify the house to stay longer or for deferred maintenance).
Benefits of a Reverse Mortgage
- Eliminates monthly mortgage payments.
- Proceeds are not taxable.
- Heirs get to keep the equity in the property and can never owe more than the house is worth.
Should you get a Reverse Mortgage? According to Forbes, “A reverse mortgage may be helpful but isn’t for everyone. There are a few factors that can make a reverse mortgage worth it:
- Your home is increasing in value considerably. If you’re building up a lot of equity in your home, you may be able to take out a reverse mortgage and still have money left over for your estate.
- You plan to stay in your home for a long time. Just like a regular mortgage, there are significant upfront costs associated with the loan. You’ll want to be sure you plan to live in that home long enough to make those costs worth it.
- You can cover the costs of your home. Since staying current on property taxes, insurance, maintenance, etc. is required to keep your reverse mortgage current, it’s important that you have plenty of cash flow for these expenses.”
If you have considerable equity in your home and are looking for ways to use that equity as a form of income, a Reverse Mortgage may be for you! Reach out to your Michigan Mortgage Loan Officer for more information.