Reverse Mortgages and Bad Credit
July 14th, 2010
- Can you get a reverse mortgage with bad credit?
- Reverse mortgages and credit card debt
- Reverse Mortgages Require Home Equity
- 5 things to remember about reverse mortgages
- Picking a Reverse Mortgage Payment Plan
More Americans are dealing with bad credit. Thanks to the recession, about 43 million Americans have credit scores of 599 or lower, according to FICO. Having bad credit makes it unlikely you can qualify for a mortgage, auto loan, or other types of credit. If you have bad credit, you may be wondering if you can qualify for a reverse loan. Here’s why bad credit won’t keep you from getting approved for a reverse mortgage.
Reverse Mortgage Guidelines
Unlike a traditional mortgage, reverse loans don’t require credit and income checks. In fact, you can have bad credit and no job and still get approved for a reverse mortgage if you meet the right criteria. You don’t need an income because you don’t have to make monthly mortgage payments. Instead, a reverse loan pays you through a lump sum, regular payments, a line of credit, or a combination of methods. Once you receive the cash you can use it for any purpose, including paying off debt.
Reverse Mortgage Age
To apply for a reverse home mortgage you must be at least 62 years old. You receive a larger payout the older you get, so it could make sense to wait a few years before applying for a loan. The amount of money you receive also depends upon the amount of equity you have in your home. The reverse mortgage lender orders an appraisal to place a value on your property.
Having bad credit won’t keep you from getting a reverse mortgage. But before you cash out your home equity, make sure you have a solid plan in place. You want to make sure that getting money can help improve your financial situtation so you can begin to repair your credit.