What Is A Reverse Mortgage?
Are you eligible for a Reverse Mortgage?
All owners of the home must apply for the reverse mortgage and sign the loan papers. Below is the borrower and property criterion for eligibility:
Borrower's profile:
- Each borrower must be at least 62 years old. In the case of a couple or co-owners, both must be 62 if their names appear on the title to the home. (If one spouse is under 62, that person's name must be removed from the title so the other person can qualify for the reverse mortgage). The age of the borrower(s) is a critical factor in how large the loan can be.
- The borrower(s) must own the home outright or have a low enough balance that the existing mortgage can be paid off through the proceeds of the reverse mortgage.
- You must occupy the property as your primary residence (more than six months/year).
- It is required that all borrowers attend a HUD Counseling Session. Counseling is done either face to face or by telephone, whichever is more convenient for the borrower(s). Counseling sessions may cost up to $125.00, but sometimes are available free of charge.
- All individuals on title must apply for the reverse mortgage, attend counseling, and sign the loan papers.
Things that do not affect eligibility for a reverse mortgage:
- Income
- Credit history
- Discharged bankruptcy
- Health of the homeowners
Property type:
- Single Family One-Unit dwellings
- 2-4 Unit Owner-Occupied dwellings
- Condominiums and Townhomes
- Some Planned Unit Developments (please contact the lender for specifications)
- Some Mobile and Manufactured Homes
Properties like townhomes, condominiums, mobile homes and modular homes often qualify only if they meet the criteria set by the FHA. Mobile homes must have been built in the last 30 years, must be on a permanent foundation, and cannot be in a mobile home park. Also, the property must comply with the criteria of an FHA inspection.
Should you decide that a reverse mortgage is right for you, the mortgage loan amount will be determined by the age of the youngest borrower, current interest rates, and the appraised value of your home. Typically, the older you are and the more your home is valued will mean a larger loan.
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