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Setting the Record Straight
Reverse Mortgage Misconceptions You May Have Read or Heard
MISCONCEPTION #14 - ITS DIFFICULT TO QUALIFY FOR A REVERSE MORTGAGE
All property types (1-4 family houses) are eligible for a Reverse Mortgage except manufactured (mobile) homes built before June 15, 1976 and co-operatives (Co-ops). Co-ops will be eligible in the future when FHA approves the administrative procedures. Even homeowners with existing mortgages that can be paid from the equity can obtain Reverse Mortgages.
Also misunderstood are the requirements for obtaining a Reverse Mortgage. Because no re-payment is required as long as one (1) surviving borrower remains in the home, there are NO income or credit requirements. Even bankruptcy does not disqualify the borrower as long as it has been discharged. . The borrower must be 62 years or older; however, both spouses do not need to be 62. There are situations where one spouse is not eligible due to being under 62. In most of these situations the loan still can be done, but with some risk to the underage spouse. The only other requirement is that the borrowers alone must own the home with no others on the deed. A reverse mortgage may also be done if the home is in a revocable trust, as long as the eligible borrowers are the only trustees.
Some borrowers feel that they will have to clear existing debts against their properties in order to qualify for the reverse mortgage. This is not true. While the debts that involve liens on the property must be paid off, they don’t have to be paid BEFORE applying for the Reverse Mortgage. They can be paid and cleared by the loan advance obtained from the mortgage. Also, credit scores pay no role in qualifying for a Reverse Mortgage. In summary, there are very simple and straightforward requirements in qualifying for a reverse mortgage. We can help see if you’re qualified and how much equity you can access from your home.
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