The Top 6 Reverse Mortgage Requirements

The Top 6 Reverse Mortgage Requirements Brought to you by MyHECM.com. Retirement resources for seniors, their families, and their advisors. A reverse mortgage is generally easy to qualify for but there are some basic reverse mortgage requirements. Before we dig into what those reverse mortgage requirements are, let's first cover some reverse mortgage basics. There are lot of misconceptions about how reverse mortgages actually work. Reverse Mortgage Basics A reverse mortgage is a unique home loan that gives you access to home equity without a mortgage payment and without giving up ownership of your home. No monthly mortgage payments are required as long as at least one borrower or non-borrowing spouse lives in and maintains the home and pays the property taxes, homeowner's insurance, and any HOA dues. You remain the owner of your home and you can leave your home to your heirs. Your heirs will inherit the equity in your home whether they choose to keep it or sell it. The reverse mortgage is a non-recourse loan. FHA covers the shortage if your home isn't worth enough to pay off the entire balance. You can take proceeds as a lump sum line of credit monthly term/tenure income or a combination of these options. Homeowners commonly use the proceeds to 1) Eliminate existing mortgage and consumer debt payments. 2) Fund home improvements. 3) Pay off medical bills. 4) Plan for long-term care. 5) Supplement retirement income and assets. 6) You can use the proceeds for whatever you like. The Top 6 Reverse Mortgage Requirements 1) Age - The minimum qualifying age is 62. If you're married, only one spouse needs to be 62. The other can qualify as a non-borrowing spouse. 2) Property Type - Eligible property types include single-family homes FHA-approved condos 1-4 unit residential properties and doublewide manufactured homes built after June 15, 1976. 3) Occupancy - You must live in the home for the majority of the year. 4) Income - The reverse mortgage requirements for income are flexible but you need to show at least some income. 5) Payment Histories - Your lender will evaluate your payment histories for property taxes homeowner's insurance and any HOA dues. If you have late payments, the lender may require a life-expectancy set aside (LESA) to pay property taxes and homeowner's insurance on your behalf. The lender will also evaluate payment histories for credit cards mortgages auto loans and any other loans that you pay. You may still qualify even if your payment histories aren't perfect. 6) Counseling - HUD requires you to attend a reverse mortgage counseling session to ensure you have a good understanding of how the reverse mortgage works. Other reverse mortgage requirements apply, but we've covered the basic ones here. Thanks for watching! We hope this was informative. Please click the Like button to help us get the word out. Thank you!