In Michigan and across the United States, people might be aware of reverse mortgages because of the number of commercials promoting them. These often feature well-known actors who give a basic explanation of the benefits of reverse mortgages. The advertisements are somewhat vague and the details of these types of loans should be fully understood before pursuing it. This is especially true for people who are facing the prospect of their home being foreclosed upon. Before moving forward, it is imperative for homeowners to understand how this works and if it can help them to prevent foreclosure.
Reverse mortgages and how they impact foreclosure
Homeowners 62 and older can get a reverse mortgage. If there is equity in the home, they can receive cash as part of the loan. It is important to note that those who had a conventional mortgage will no longer be obligated to pay it, but equity will be taken from the home each month. This will increase what is owed to pay it off. As time passes, the equity will decrease. The home must be maintained, property taxes paid and insurance coverage must be in place. The owner is required to live in the home as his or her primary residence. In general, any type of home is eligible for a reverse mortgage.
A positive is that it is not linked to a person’s credit score, assets or other requirements to be approved. If the owner dies, then the heirs will either need to repay the loan and buy the property or sell it to pay it back. When a person cannot make the payments on a conventional mortgage and they have fallen so far behind that the property may be foreclosed upon, then the reverse mortgage can prevent that by eliminating the need to make mortgage payments. The owner can even receive a lump sum, depending on how much equity is in the home. Still, those who have equity may not want to lose that.
Experienced representation can help with foreclosure issues
People who are behind on their mortgage may realize they are facing a major challenge. The past year has been difficult with job loss, medical expenses and dramatic, unexpected life changes. People fearful and overwhelmed do have options. It is vital to remember this is a legal issue that can be handled with professional assistance. Foreclosure alternatives are available, but having experienced guidance with the various options may be essential. Contacting those who understand mortgage foreclosures and preventing them can help.