Reverse Mortgage Eligibility
There are millions of people who previously applied for and received a Reverse Mortgage. Also, maybe you viewed Tom Selleck’s TV commercial regarding this instrument and the eligibility requirements. The following will provide additional information on Reverse Mortgages.
Requirements for a Reverse Mortgage
- Reach 62 years old.
- Sufficient equity in your home.
- Live in the home as your primary residence.
- The home must meet HUD standards.
- Not delinquency on any federal debt.
- Participate in a HUD-approved counseling session.
- Must be able to continue to ppay taxes, insurance, HOA payments, and home maintenance.
If applying for a reverse mortgage, make sure you understand exactly what you’re signing up for, and review the costs involved.
Eligibility Requirements and Commitment to Qualify for a Reverse Mortgage
- All owners must reach their 62 birthday.
- All owner must live in the home as their primary residence.
- Equity must be sufficient.
- Applicants must meet financial eligibility criteria as established by HUD.
- The home must be owned outright or possess only one mortgage.
- The existing mortgage or loan must be paid off using the proceeds from the Reverse Mortgage.
- Payment of current property taxes, homeowner’s insurance and other obligations, such as homeowner’s association dues must continue.
- Prior to purchasing the Reverse Mortgage, applicants must receive counseling from a HUD-approved counselor.
- After receiving the Reverse Mortgage, the recipient must maintain the property and keep it in good condition.
- To qualify for a Reverse Mortgage, the residence must consist of one of the following:
- the home must be a single-family home
- a multi-unit property with up to four units
- a manufactured home built after June 1976
- a condominium
- a townhouse.
Factors Considered in Calculating Home Equity Disbursement
- Age of the youngest homeowner
- The current value of the property – This is the amount that your home is worth. Property Value information is available online from several websites to include: Zillow, Redfin, and Trulia.
- Mortgage Balance – This is the amount that must be paid on mortgages and loans on your home.
- Interest rates
- Government-imposed lending limits.
The company that you decide to use will then inspect the property and give you an estimated amount of what you may be eligible to receive.
Frequently Asked Questions Regarding Reverse Mortgage Eligibility
- If the homeowner is not yet 62, but he or she possesses a permanent disability, will they qualify?
- No he or she will not qualify. There are no exceptions for a person with a disability.
- Can you get a Reverse Mortgage with an existing mortgage or home loan?
- The Mortgage or Home Loan will be paid off with the proceeds at closing.
- If a homeowner is over 62, will he or she automatically qualify for a Reverse Mortgage?
- It depends on the home equity.
- If there is not enough equity to qualify, what can be done?
- In this situation, the homeowner cannot get a Reverse Mortgage loan until the balance of their existing mortgage is lowered or paid off.