All you need to know about reverse mortgage eligibility
A reverse mortgage refers to a loan. People who are older than 62 years of age and have home equity can borrow against the value of the home they own. They can then receive funds in the form of a lump sum amount, line of credit, or fixed monthly payment. In the following article, we are going to be talking about reverse mortgage eligibility in detail.
The basic qualifications for reverse mortgage eligibility include:
- Age qualifications
To qualify for a reverse mortgage, you need to be over 62 years of age. However, in some cases, if the spouse may be under 62 years of age, you may still be eligible. But, even in this case, it would be possible for you to get a reverse mortgage. - Owner-occupied
You must be living in the house you wish to apply for in a reverse mortgage. It needs to be your primary residence to gain a reverse mortgage on that. If it is a vacation home or your secondary home, you may lose out on reverse mortgage eligibility. - Counseling session
You need to complete a proper counseling session with an agency that is approved by the U.S. Department of Housing and Urban Development. This session is made to ensure that you understand the rules completely before making the final decision. - Home equity
You would really need to have proper equity in the house. Typically, you would need at least 50% equity to be eligible for the reverse mortgage.
Home qualifications for reverse mortgage eligibility
Your home needs to qualify for reverse mortgage eligibility as well. The criteria for the same include:
- Types of occupied homes
Reverse mortgage is available for all kinds of owner-occupied homes. These can be single-family homes, two- to four-unit multiple family houses, as well as townhomes and FHA-approved condos. Depending on the kind of ownership, the amount of your reverse mortgage can be decided. - Working order
Your house definitely needs to be in proper order, otherwise you may not get a reverse mortgage against it. The interior and exterior need to be maintained and deemed safe.
Finances for reverse mortgage eligibility
As for financial reverse mortgage eligibility, the criteria are as follows:
- Verification of income and assets
To qualify for a reverse mortgage, your assets and income are verified. Homeowners association fees and other obligations may be taken into consideration as well. - Credit report check
A credit check is run mandatorily to know your credit score. It helps the loan provider understand your debts and then compare them to the income as well as assets before making a decision.
These financial qualifications help you get the right loan at the right time. All of the aforementioned criteria are crucial to qualify for reverse mortgage eligibility. They are very important if you wish to get funds against your home equity. It is a great option for funding for older citizens.
