There are a lot of options for people who are seeking financing for major expenses, or even just living expenses as they get older. This is especially true for senior homeowners who have a lot of equity in their homes. One of these options is a reverse mortgage.
  
WHAT IS A REVERSE MORTGAGE?
A reverse mortgage is similar to a second mortgage in that you borrow money based on the amount of equity you have in your home.   The difference is that instead of paying the lender, the lender pays you to live in your home!
  
HOW IS A REVERSE MORTGAGE DIFFERENT FROM A SECOND MORTGAGE?
It is different in that you receive the funds in payments, usually monthly, and are not required to pay back the loan as long as one of the borrowers lives in the home as their primary residence. It is also different from a second mortgage in that the value of your home is used as the determining factor in the amount of the loan, rather than your income. This is why it is often used by senior citizens and retired people as a means of paying for in-home medical care or nursing home care for a spouse or parent. 
 
WHAT DO I NEED TO KNOW ABOUT REVERSE MORTGAGES IN MICHIGAN? 

• The state of Michigan also requires that anyone taking out a reverse mortgage must have homeowner’s insurance. 
• You must be age 62 or older.
• In Michigan, income from a reverse mortgage is not taxable, and it will not count against Medicare eligibility or benefits.   However, the added income can affect Supplemental Security Income and Medicaid.

HOW CAN I RECEIVE MY PAYMENTS FROM A REVERSE MORTGAGE?  
 
There are five ways to receive payments:

• The tenure plan, which gives you equal monthly payments for as long as you live in the house.
• Term, which is equal monthly payments for a predetermined amount of time. 
• Line of credit, which acts like a savings account.  The money is yours for you to use until it runs out.  
• Modified tenure, which gives you a line of credit, but also gives you monthly payments for as long as you live in the home.  
• Modified term, which also gives you a line of credit, but pays you monthly payments for a fixed period of time.    

Financial advisors in Michigan caution that you should carefully evaluate the open-ended nature of this type of loan.   For example, if you receive a certain amount of money every month, to offset the cost of living in Michigan, you have to discern whether that amount will go as far toward your expenses later down the line.

A reverse mortgage is a program for seniors that provide seniors with financial security and independence.   This loan works differently than the traditional forward mortgage that you are used to.  Instead of you paying your lender monthly payments, the lender pays you to live in your home.   The cash paid to you is tax-free and you do not have to pay back a dime until you leave your home.
 
As long as you are 62 years or older, live in a qualifying home and are current with all of your taxes, you can apply for a reverse mortgage.
 
HOW MUCH MONEY CAN YOU GET WITH A REVERSE MORTGAGE IN PHOENIX, AZ?
 
The loan amount you depends on the following factors: 

• Your Age.  The older you are, the more money you will receive.
• Home Value and Location.  If your home is in an area where the average home value is higher than the national average, you will receive more money.   If your home is in an area where the average home value is lower than the average, then you will likely receive a lower loan amount.
• Interest Rate.  Depending on the type of loan, you loan amount will be determined by the current interest rates.  

WHAT TYPES OF PRODUCTS ARE AVAILABLE? 
There are three main products to choose from when you shop for a reverse loan.  These options are:

• Home Equity Conversion Mortgage (HECM) – a program backed and insured by the federal government.
• Home Keeper ® - A Fannie Mae loan, this program allows you to borrow more than you can with the HECM loans.
• Jumbo Cash Account – Designed for seniors with higher home values, this option provides the highest lending limits for borrowers.

A reverse mortgage is a loan that allows seniors to supplement their income by enabling Florida residents to borrow the equity from their home. Instead of you paying your lender regular monthly payments as you may have done over the years with a traditional forward mortgage, a reverse mortgage works in the opposite manner. With a reverse mortgage, the lender pays you to live in your home, giving you peace of mind and financial independence.
 
BENEFITS OF A REVERSE MORTGAGE IN FLORIDA 

• You remain the owner of your home
• Your money is treated as tax-free income
• You don’t repay the loan until you leave your house 

REVERSE MORTGAGE PRODUCTS IN FLORIDA

Home Equity Conversion Mortgage (HECM) – The most popular reverse mortgage out there making up over 90% of the reverse loans funded, the HECM (pronounced heck-um) is a loan that is insured by the federal government.

Home Keeper ® - A product of Fannie Mae, the Home Keeper allows you to borrow more money than you would be able to with the HECM loans.
Cash Account – A product designed specifically for high valued homes, the Cash Account allows seniors to tap into a greater amount of the home’s equity.
 
HOW DO YOU APPLY FOR THE REVERSE LOAN?

Find a Florida Reverse Mortgage Lender in our database here and request more information today!

INTRODUCTION TO HOME KEEPER MORTGAGE
When you took out a home mortgage, you paid your mortgage lender the down payment and then proceeded to pay your monthly amortization.  Through regular amortization, you have been able to steadily build up your home equity (the part of the value of your home that you own).
 
The moment amortization is over and your home is free and clear of debt, it becomes solely your property and your home equity becomes equivalent to the value of your entire home.  At this point, this stored value or home equity can now be considered as your savings.
 
To withdraw your ‘savings’ in your home, you can take out a reverse home mortgage like the Home Keeper Mortgage.
  
WHAT IS A HOME KEEPER MORTGAGE
The Home Keeper Mortgage is a reverse mortgage that is backed by Fannie Mae.   It allows you to cash out on the equity in your home and have it paid to you in a variety of ways.  In most states, you can choose to have your loan paid to you as a monthly supplement to your income, as a line of credit that you can use as you see fit, or as a combination of the two.   If you live in the state of Texas, contact your local reverse mortgage lender as the options for your state is different.
 
The Home Keeper Mortgage lets you borrow against the equity that you have stored up in your house, allowing you to fund your retirement or even to have a little fun during your golden years.   What makes the Home Keeper special is that you do not have to make any payments on your loan until you sell your house, pass away, or convey the title to someone else (or if you move out of the house, even without selling it).  
 
The special provisions of this reverse loan means that you do not have to worry about making monthly payments when you use the Home Keeper Reverse Loan to supplement your retirement income.  Even better news is the fact that when the loan becomes due, you or your heirs will only have to pay only the lesser of the actual amount due or the value of your home.   This means that even if you borrow more than your home is worth, you will only have to pay back the sale price of your home rather than struggling to pay a greater amount.  
 
Fannie Mae also backs the Home Keeper Mortgage, which means that your payments will continue to come in for as long as you are eligible.  What this means is that if your lender stops sending you your payments for any reason, Fannie Mae will ensure that you still get your money, making the Home Keeper Reverse Mortgage a safe option for seniors. 
  
THE HOME KEEPER MORTGAGE STRUCTURE
In the Home Keeper Mortgage plan, a reverse mortgage lender will lend you money with your home as collateral.  In a reverse annuity mortgage setup, for instance, the lender will give you a monthly income.  Depending on the terms of the contract, you can get a credit line, instead, or a monthly income plus credit line combo.
 
To get an estimate on the amount of monthly income or credit line you can expect to get from your home through the Home keeper Mortgage, you can use a Reverse Mortgage Calculator.
 
It would also be best if you were to talk to a financial consultant to get relevant reverse mortgage information before you decide to take out a Home Keeper Mortgage.  The structure of reverse mortgages may differ by state.  The additional reverse mortgage info will let you make informed decisions.
   
REPAYMENT
Repayment commences only after you cease living in your home or if the reverse mortgage loan contract has been breached.  The money for repayment will come from the sale of the house itself.  In case you or your heirs wish to keep your home, though, you can come up with the total amount you owe and use that to pay off the loan.
 
If your home were sold to pay for the loan, the total amount of the sale would become your repayment.  However, if your loan balance were less than the actual sales proceeds, the reverse mortgage lender would take only the actual balance.  Any amount in excess of your total balance would become yours or your heirs’ to keep.

ELIGIBILITY REQUIREMENTS
With a Home Keeper Loan, you can get a monthly check as a supplement to your income just for owning and living in your house! The basic requirements to obtain this reverse mortgage loan requires that the borrower(s):

• Is at least 62 years old
• Own and lives in the home as their primary residence
• Consults with an approved Fannie Mae Counselor

This reverse mortgage does have an age limit, which is 62 years of age for anyone applying for the loan and any co-borrowers (there can be up to three borrowers on the same loan). All of the borrowers on the Home Keeper Mortgage must consider the home in question their primary residence. While the home does not have to be completely paid off for you to apply for the reverse mortgage loan, you will be required to pay off the balance of your forward mortgage with the first draw from your Home Keeper Mortgage once you are approved.

To be eligible for the Home Keeper Mortgage from Fannie Mae, your home must meet certain requirements. The home must be a single-family house, condominium or a unit within a planned unit development (PUD). Visit our reverse mortgage lender directory and contact your local lender for more information on the requirements.

The next and final step before applying for the loan is for you to meet with an approved reverse mortgage counselor. This meeting is to help inform you of the advantages and disadvantages of a reverse mortgage and will also be an opportunity to have any questions you may have answered.