Finance
In Michigan, a reverse mortgage is available to homeowners who are:
AUnder age 40 with substantial equity
BAge 62 or older, with significant equity in their primary residence✓ Correct
CAny age, as long as the property is paid off
DOnly available for commercial properties
Explanation
HECM (Home Equity Conversion Mortgage) reverse mortgages are available to homeowners age 62 and older who have significant equity in their primary residence. They allow borrowers to convert equity to cash while remaining in the home.
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Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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