What are the basic requirements to qualify for a reverse mortgage? Read this brief article to find out.
Do I Qualify For A Reverse Mortgage?
Reverse Mortgage Qualifying Criteria
- Age - The youngest borrower must be at least 62 years old. This means that if a husband is 62 and his wife is 59, they would have to wait 2-3 years to apply together. Some reverse mortgage lenders might suggest taking the wife off of the title of the house so that the husband could apply alone. But beware of this idea because anyone else living in the house would have to repay the loan once the borrower passed away or moved out permanently.
- Income - Because there are no monthly mortgage payments due on a reverse mortgage, no income documentation is needed to qualify. Since the purpose of a reverse mortgage loan is to assist seniors in meeting their financial obligations, it is still wise to have a budget in place to follow.
- Credit - There is no minimum credit score required to qualify for reverse mortgages. The number of debts and their monthly payments will not be considered. The only issue related to credit that could disqualify an application would be an open bankruptcy. Any bankruptcy would have to be completely discharged before applying for a reverse mortgage loan.
- Assets - Most traditional mortgages require you to have some savings on deposit. That is not the case with a reverse mortgage. None of the borrowers need to prove any amount of liquid or other assets in reserve. The asset required for a reverse mortgage is the house put up as collateral. The house should little or no mortgage debt
- Eligible Property Types - The home must be occupied as a primary residence. No rental properties can be used. If the property is 2-4 units, one unit must be occupied by the borrower(s). Condominiums, manufactured homes, and unique properties may or may not qualify. Check with a reverse mortgage lender to see if the house is acceptable collateral.
There you have it--as long as you are old enough and have lots of home equity, you are likely to qualify for a reverse mortgage. Check with a lender and a HUD-approved reverse mortgage counselor and see if this loan is the best way to meet your objectives.
Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.