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Are you eligible for a reverse mortgage?

Posted on: 26th Mar, 2004 03:47 am
If you are living on fixed income with home equity as your only asset and need additional funds on a regular basis, you may be the right person to look out for reverse mortgages. However, make sure that you don't want to leave much of the property to your heirs.

Reverse mortgages require you to satisfy the criteria as given below:

Borrower's profile:

  • You and your co-borrower, if any, should be aged 62 years or above.

  • You should be the owner of the property against which you intend taking the reverse mortgage.

  • You should occupy the property as your primary residence.

  • There should be enough equity in your home.

  • If there are past debts on your home, pay them off prior to taking out the loan or else pay them off right after you get the loan funds.

Property type:

  • 1 unit single family dwelling

  • 2-4 unit owner occupied dwelling

  • Condominiums and townhomes

  • Planned unit developments (PUDs)

  • Mobile home or manufactured homes
However, properties like townhomes, condominiums, mobile homes and modular homes often qualify only if they meet the criteria set by the FHA. For mobile homes, one has to own the land in addition to satisfying the criteria set by FHA.

The best thing about reverse mortgages is that you don't need great income or credit to qualify for such loans. In fact, lenders don't ask for a minimum income or credit requirement when it comes to qualifying for reverse mortgage.

Related readings
Can you tell me if a person is eligible to obtain a reverse mortgage if they have been convicted of a felony in the past number of years? And if yes or no where can I find verification of the fact that they can or cannot obtain one of these loans? I really need to know. Thank you.
Posted on: 18th Dec, 2009 09:42 am
>>Can you tell me if a person is eligible to obtain a reverse mortgage if they have been convicted of a felony in the past number of years?

Yes. The only qualifiers are age, type of residence, and it has to be the primary residence. Nobody cares if they've been convicted of a felony.
Posted on: 18th Dec, 2009 10:02 am
What if the applicant (home owner who has equity) is less than 62 years old, can they still apply for the reverse mortgage? If the age criterion is strictly enforced, is there a comparable program to apply for so that the home owner can get cash out of their home (e.g., a HELOC)?
Posted on: 25th Dec, 2009 04:22 pm
>>can they still apply for the reverse mortgage?

They can apply when they're 61, but can't sign the final loan documents until they're 62.

>>is there a comparable program to apply for

No, there isn't any other mortgage that's comparable to a Reverse Mortgage.

>>so that the home owner can get cash out of their home (e.g., a HELOC)?

They can certainly apply for a HELOC, but they're going to have to qualify for the loan based upon their Income, Assets, Employment and Credit, and they'll also be a monthly mortgage payment. None of those are requirements for a Reverse Mortgage.
Posted on: 27th Dec, 2009 01:24 pm
Do I have to borrow a minimum amount? Can it be $20,000 and no more?
Posted on: 27th Feb, 2010 12:52 pm
>>Do I have to borrow a minimum amount? Can it be $20,000 and no more?

You can borrow $20,000 and keep the rest in the Credit Line. And the Credit Line grows. Right now the growth rate is around 3.5%. That means if you put $100,000.00 of equity in the credit line, a year from now you'd have approximately $103,500.00. That's an additional $3,500.00 of equity you're able to convert into cash.
Posted on: 27th Feb, 2010 04:03 pm
I own a house valued at $80,000. At 72 years old hpw much equity do I need in my home to be eligble for a reverse mortgage?
Posted on: 28th Feb, 2010 07:21 am
You didn't mention the State you're living in, and that'd help because some States have different fees then others, so I'm going to assume you live in California and your birthdate is 2/28/1938.

You'd receive approximately $39,309.00 with a fixed interest rate of 5.56%
Posted on: 28th Feb, 2010 07:29 am
My mother is interested in a reverse mortgage loan. She owns her home free and clear, valued at about $200,000 and wants to pay off some credit card debt. I'm worried that she'll go through the money too quickly and will have nothing to fall back on later. She is 65. I think that she is too young to go this route and will jeopardize her financial future and the possibility that she might need the money later.
Posted on: 11th Apr, 2010 04:53 pm
Your mother can opt for monthly cash advances from the lender. She will receive monthly payments in place of a lump sum amount at one go. Thus, she won't be able to use off the money quickly and will also have some amount to fall back upon.
Posted on: 12th Apr, 2010 03:43 am
>>I'm worried that she'll go through the money too quickly and will have nothing to fall back on later.

That's a valid concern and will probably happen if she hasn't displayed financial discipline in the past. I've had lots of clients take out enough cash at funding to dliminate their credit card debt, and the rest of the cash was put into the Credit Line, for growth. But she'll have easy access to the Credit Line, and can deplete it if she's not prudent.
Posted on: 12th Apr, 2010 08:55 am
i have payed off my mortgage, do i qualify, do i qualify?
Posted on: 07th Jun, 2010 10:20 am
i have payed off my mortgage, do i qualify, do i qualify?
Posted on: 07th Jun, 2010 10:20 am
i have no mortgage payments on my house, do i qualify for a reversed mortgage?
Posted on: 07th Jun, 2010 10:26 am
i have no mortgage payments on my house, do i qualify for a reversed mortgage?
Posted on: 07th Jun, 2010 10:26 am
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