Retirees make up about one-fourth of Michigan’s population, and many of them face rising costs on a fixed income. A reverse mortgage might be the solution. Our partners at ConsumerAffairs researched the best reverse mortgage lenders in Detroit, putting together this guide to help with key considerations.
How to choose a reverse mortgage lender in Detroit
Instead of borrowing money to purchase a home, with a reverse mortgage you give up equity in your home to a lender, who in return makes a predetermined payment to you each month.
The more your home is worth, the better positioned you are to borrow or receive through a reverse mortgage in Detroit. And with the value of homes on the rise, it’s an ideal time to consider the benefits of a reverse loan.
Throughout the first half of 2018 the metro Detroit area was sizzling, according to the National Association of Realtors Market Hotness Index, which measures supply and demand dynamics of local areas.
Some of that activity is thanks to local boomers downsizing to lofts, condos and cozy one-bedrooms. This year a new trend emerged— retirees moving to downtown Detroit. The classic retirement locales still top the list of preferred retirement living.
Metro Detroit seniors are also flocking to: the Grosse Pointes, the Bloomfield Hills area, the Huntington Woods area, the Birmingham area and cozy thumb towns.
For reverse mortgages in Detroit, the value of your home determines the size of your loan, but it’s the equity you have in your home that will help you qualify. In Michigan, the median amount of home equity wealth is only $11,000. But that number jumps significantly if you narrow the sample to Michigan seniors.
Reverse mortgages are ideal for seniors:
Whose homes are paid off or almost paid off
Who don’t plan on bequeathing their home to anyone
Who can afford basic home care costs
Who have no plans to move or be cared for in a nursing facility
All reverse mortgages are non-taxable and generally do not affect Social Security or Medicare benefits. Quality reverse mortgages should keep ownership intact and defer payment until death or relocation. There are two types of reverse mortgages: proprietary and HECMs.
Proprietary Reverse Mortgages
Can be used for anything
HECMs (Home Equity Conversion Mortgages)
Federally backed, can be used for anything, available to all seniors
More upfront cost, must meet with government-approved housing counselor prior to approval
Keep in mind, most reverse mortgages in Detroit require you to maintain your home and property and remain current on property taxes and homeowners insurance. If you fall behind, the lender can declare your loan due at any time.
Under the right circumstances, reverse mortgages make a lot of sense. If you can afford the monthly and yearly costs of your home, but doing so means cutting back on eating out, entertainment and other outings, a reverse mortgage could be right for you.
Michigan has no specific requirements regarding reverse mortgages but offers online advice to seniors considering this type of loan. For further information on reverse mortgages, check out the AARP Reverse Mortgage Guide.
If you decide a reverse mortgage is right for you, take a look at the best reverse mortgage lenders in Detroit listed below.
This top-ranking reverse mortgage lender makes it a priority to earn and keep your trust. Finance of America Reverse has plenty to offer: lump sum, tenure payment and line of credit options; an average closing time of 30 days; and award-winning customer service. According to customers in Detroit, if you’re unsure of what something means, the team at FAR will go out of their way to explain it to you.
As one of the country’s largest reverse mortgage providers, Liberty Home Equity Solutions has worked with more than 50,000 seniors since 2003, and all of that experience has led to their reputation as industry experts. Offering HECMs and a promise to match or beat all competitors, this lender is an industry favorite. Customers say they love the responsiveness and personal attention provided by Liberty Home Equity Solutions representatives.
This award-winning company prides itself on a 97 percent customer satisfaction rating from in-house surveys. American Advisors Group offers HECMs and an expert staff to assist with the process every step of the way. Customers say that although sometimes the process takes longer than they had hoped, it works out in the end and is well worth the wait.