What are the qualifications for a reverse mortgage?
Are Your Qualified For Reverse Mortgage?
A reverse mortgage is a kind of loan and with any type of financing; the lending institutions want borrowers to cater to certain eligibility criteria. Reviewing this article would help you check whether it is worth the time spent to apply for reverse mortgage.
Age requirements
A homeowner should be 62 years old at least to become qualified for reverse mortgage. Do you wonder why? It is because the requirement imposed by federal government. Your age decides how much you are liable to borrow. Typically, the younger you are, the fewer you will get and the older you are, the lump you will receive. Even if they are eligible, few applicants are too young for reverse mortgage to be a substantial source of funds
Your ownership standing
The next necessity is that you either possess your home clear and free or own a small remaining mortgage balance, known as small balance which is being defined as one which is paid off using the reverse mortgage proceeds. You also need to own title to the house and reside in it as your chief residence.
You cannot obtain a reverse mortgage for a vacation home, a rental home or even a home which used to be your main residence however has been unattended for a year. The home normally has to be single-unit living, except 2 to 4 unit property, where in you live in single unit and rent out others. When your home is a condominium, then you can avail a reverse mortgage with it when it is with the department of HUD’s approved list of condominium complex.
Your funds
As you are not making payments with a reverse mortgage, however rather obtaining payment, you need not necessarily want any income to be eligible for this loan. When the mortgage has closing costs and origination fees, you can tie up them into the loan when you done like paying for them out-of-pocket and up-front
The counseling requirement
Before you obtain a reverse mortgage, you are necessitated by the federal government to review mortgage counseling. Reverse mortgage home counselors work for government-approved, independent counseling agencies and their function is to explain the rates and consequences of obtaining an HECM and the different ways you can obtain the proceeds. They also assist you discover other choices to make ends meet, like availing public assistance to pay for medications, utilities and food.