Reverse Mortgage Fact Sheet

It would be a shame to spend hours of your time doing research for a reverse mortgage loan only to find that your scenario does not fit one of the basic guidelines to be approved. Following are the four basics areas a reverse mortgage lender will look at to consider your application.

Age - The youngest person on the loan must be at least 62 years old. Be careful with this requirement. If one of the home's occupants is older than the other and the youngest is not yet 62 years old, a reverse mortgage lender might suggest taking the younger occupant (usually a spouse) off of the title of the house. A reverse mortgage becomes due when the last borrower passes away. If there is someone occupying the house that does not go onto the loan, that person could end up losing their place of residence. Make sure that the youngest person on title is 62 years old to avoid this trap.

Credit - There is no minimum credit score required. A senior can qualify even with a recent bankruptcy as long as the bankruptcy has been completely discharged. The amount of debt does not matter either because there is no debt to income ratio used to qualify.

Income - There is no income requirement. A lack of sufficient income is likely the main reason that a senior is looking at the option of a reverse mortgage. Usually, the reverse mortgage is meeting a shortfall in cash flow to meet a person's basic needs.

Assets / Property Type - While there is no required amount of liquid assets on reserve used to qualify for a reverse mortgage loan, the reverse mortgage lender will require the borrower to have at least one asset - the home. The house used as collateral will need to meet minimum lending requirements. There also must be sufficient equity to make the loan work. If your property is very unique, is manufactured, or is a condominium, double check the property type with the reverse mortgage lender before you spend any money on any loan related fees.