How to Qualify for a Reverse Mortgage

How to Qualify for a Reverse Mortgage.

If you thought of applying for a reverse mortgage, it is important to understand how to qualify for it. This loan is special because it is targeted to a special group of homeowners – seniors, ages 62 years and older, and it can be fairly easy to qualify for.

The HECM (Home Equity Conversion Mortgage) loan, otherwise known as a reverse mortgage loan allows homeowners to convert a portion of the equity on their home into cash. This Federal Housing Administration (FHA) approved loan provides senior citizens greater financial security during their retirement years. Many senior citizens use their reverse mortgage proceeds to supplement their Social Security, pay for unexpected medical expenses, make home improvements, enhance their retirement years and much more.

Qualifying for a reverse mortgage is easy, as it currently does not require credit score or income requirement, however, there are some general requirements that homeowners must meet.

Read on to learn more about the general requirements for reverse mortgage loans. If you want to learn more about the reverse mortgage process, feel free to drop a line here.

General Requirements.

1. At least one of the borrowers must be at least 62 years old, but loan proceeds will be done based on the age of the younger homeowner

2. The home must be your primary residence.

3. You must have sufficient equity in the home.

You can also use this Reverse Mortgage Calculator to see if you qualify.

General Information about Qualifying for a Reverse Mortgage.

1. Reverse mortgage proceeds are calculated based on the age of the youngest borrower and the value of the home.

2. If you have existing mortgage on your property, you can use the reverse mortgage loan to help pay it off.

3. A reverse mortgage will not affect Social Security or Medicare benefits. However, it may affect Medicaid and other government assistance programs. Contact a professional to see if this may affect you.

4. The homes/property that may qualify are the following: single-family homes, 2-4 unit properties, manufactured homes (built after June 1976), condominiums, and townhouses. Co-ops do not qualify.

5. You may not have defaulted on any government debt.

Benefits of Reverse Mortgage.

1. The bank or lender will not own the home, you will continue to retain title and ownership to the home.

2. You will not be required to make a mortgage payment to your reverse mortgage as long as you live in your home as your primary residence. You are still responsible for property taxes, insurance and repairs to the home.

3. Because you are not making monthly payments, there are currently no credit score or income requirement. (Beginning January 2014, a financial assessment will be put into place to protect the borrowers.)

4. There are no regulations on how reverse mortgage proceeds can be used.

As you can see, if you are looking to do a reverse mortgage, it is quite easy to qualify for. To learn more about reverse mortgages, you can speak with an advisor at 1-888-808-8486.

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About the Author:

I have been working in the reverse mortgage industry for 20-plus years. My goal is to provide consumers the most up-to-date and relevant information about the reverse mortgage industry and how it can affect them.

Thanks so much for reading!

-Alan F.

 

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