Clarkston Mortgage Team

Reverse Mortgage

Mortgage options refer to the various choices available to homebuyers when selecting a loan to finance their property purchase.

Reverse Mortgage

In a word, a reverse mortgage is a loan a homeowner aged 62 or older with considerable home equity can borrow against the home's value and receive funds as a lump sum, fixed monthly payment, or line of credit.

What is a Reverse Mortgage?

A reverse mortgage loan, like a traditional mortgage, allows homeowners to borrow money using their home as security for the loan. Also, like a conventional mortgage, the title to your home remains in your name when you take out a reverse mortgage loan. However, unlike a traditional mortgage, borrowers don't make monthly mortgage payments with a reverse mortgage loan. Instead, the loan is repaid when the borrower no longer resides in the home. Interest and fees are added to the loan balance each month, and the balance grows. With a reverse mortgage loan, homeowners must pay property taxes and homeowners insurance, use the property as their principal residence, and keep their house in good condition.

Who is eligible for a Reverse Mortgage?

To be eligible for a Reverse Mortgage, the applicant must be 62 years or older, own the property, and occupy it as their main residence. In addition, they must maintain the home with required repairs, property taxes, and insurance. Also, the property does need to satisfy specific FHA property standards. Finally, the applicant must participate in a reverse mortgage counseling session (this can be done over the phone or in person.)

Borrower Requirements and Responsibilities

  • Age qualification: All borrowers listed on the title must be 62 (some private-label reverse mortgages go down to age 55). If one spouse is under 62, they might be able to get a reverse mortgage. However, the loan officer must collect additional information upfront.
  • Primary lien: A reverse mortgage must be the preliminary lien on the home. Any current mortgage must be paid off using the proceeds from the reverse mortgage.
  • Occupancy requirements: The property used as collateral for the reverse mortgage must be the main residence. Vacation homes and investor properties do not qualify.
  • Taxes and Insurance: Borrowers must be up-to-date on real estate taxes, homeowners insurance, and other mandatory obligations like condominium fees.
  • Property Condition: Borrowers are responsible for completing the required repairs and maintaining the property's condition.
  • Conveyance of the mortgaged property to the estate or heir after the mortgagor's death: The estate or heirs may satisfy the reverse mortgage debt by paying the lesser mortgage balance or 95% of the current appraised value of the property. This is done when a reverse mortgage becomes due and payable upon the death of the last surviving borrower.

Let’s Chat

Start your journey today, feel free to reach out to us for personalized mortgage guidance and assistance.

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1641 S. Milford Rd., STE C106
Highland, MI 48357

Click & Learn

The Loss of Ownership
They're Expensive 
The Loss Of Inheritance
The Loss of Benefits
A Last Resort

The Loss of Ownership

Risk Factor

The lender or the government will take my home.

Solution

That’s just plain false. With a reverse mortgage, you or your estate continue to retain control of your home’s title.

They're Expensive

Risk Factor

Reverse mortgages can be expensive.

Solution

Reverse mortgages and FHA loans have similar interest rates. However, they may vary from lender to lender.

The Loss Of Inheritance

Risk Factor

One common pitfall of reverse mortgages is that children and loved ones will lose all their inheritance.

Solution

When the loan reaches maturity in the future, your heirs may choose to sell the home to repay it, allowing them to inherit all the remaining equity of your home.

The Loss of Benefits

Risk Factor

Losing Medicare, social security, and pension benefits is a reverse mortgage pitfall.

Solution

Your Medicare, social security, and pension benefits remain unaffected regardless of whether or not you become a reverse mortgage borrower.

A Last Resort

Risk Factor

Reverse mortgages are a loan of last resort.

Solution

Most people use a reverse mortgage line of credit as a safety net to draw on in case of emergencies.

Clarkston Mortgage

Many years of dedicated service have allowed us to play a crucial role in turning home aspirations into reality, always with a keen eye on keeping it within our customers' financial reach.
(248) 214-8526 info@clarkstonmortgage.com
1641 S. Milford Rd., STE C106
Highland, MI 48357
Company NMLS: #1862063
NMLS Consumer Access
NMLS #1862063 | Licensed In: MI, FL, CA, CO & TX
The Clarkston Mortgage Team, powered by Platinum One Lending
Disclosure:
The content provided within this website is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply. Mortgage loans may be arranged through third party providers.
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