If you are a senior living in Michigan looking to raise finance to help in retirement, you may have heard the term reverse mortgage. There is still a lot of confusion and misconceptions surrounding this financial product. Here we answer the question "What is a reverse mortgage?" After reading this you should be able to decide whether this is an option that is worth pursuing.
A reverse mortgage allows you to turn the equity in your Michigan home into cash. It is only available to people aged 62 or over, so it tends to be used by retirees as a way of supplementing their income.
You can receive payment by way of a cash lump sum, a line of credit or a monthly income. The attractive thing for many customers is that there are no monthly payments to make, unlike a normal mortgage. The money that is drawn down is tax-free.
There are many baby boomers coming up to retirement that are realizing that the amount of income that they are going to receive during their retirement is not going to be sufficient to live on. This has led to there being a big increase in interest in reverse mortgages.
The money raised can be used for any purpose. This includes supplementing existing Michigan retirement provisions, paying for medical care or carrying out modifications to the house such as installing a ramp or downstairs shower. You could even use the money to go on a holiday of a lifetime or buy a new car.
While this sounds very attractive, are there any downsides to a reverse mortgage? The main one is the amount of equity in the property will be reduced when you come to sell it. This maybe important to you if you were planning on having your children inherit your house.
There are plenty of helpful resources available to you to further learn about reverse mortgages. You can choose to speak to housing counselor or find resources online.
Reverse Mortgage Faq in Michigan
Typically as we aim to assist aging parents we are still also attempting to take care of our own families. Residing in the very same home could make life easier. It eliminates less of the carer's personal time to be ideal on the properties.
This indicates you are quiting your self-reliance in some methods, though being able to share the monetary responsibility can typically offset this feeling, it may likewise mean that you quit your own stake in the real estate market.
With a realty market that practically doubles every 10 years, you may desire to think about keeping your stake, maybe by renting your very own residential or commercial property. Frequently, in nowadays of durability, we are the 'old' looking after the 'older' and it is challenging to predict if our own health will always allow us to remain in this circumstance.
There can be numerous reasons that you or your spouse might not be able to stay in the house of the aging moms and dad. Arthritis might make the stairs unmanageable, there may be breathing issues establish, you might wish to transfer to be near a customized medical facility for yourself, one of you may have to go into a nursing home that is not close by. It sounds morbid, however the list is real and unlimited.Home Equity Conversion Mortgage | Chase Reverse Mortgage