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With a reverse home mortgage, the lender pays you
either one lump sum, establishes an equity line, or
distributes monthly payments for the rest of your
life. While a reverse home mortgage allows you to
retain your home and secure your finances during old
age, there are certain qualifications that need to
be met before qualifying for a reverse home mortgage.
There are two major requirements to qualify for a
reverse home mortgage. First you must be at least
62 years of age (it is still possible to qualify for
a Reverse home mortgage if both husband and wife are
applying and only one is 62 or older. Alternatively,
at a later date it is possible to refinance and add
the other borrower). Generally, the longer the life
expectancy, the smaller the loan for which you would
qualify; conversely, the shorter the life expectancy,
the larger the loan amount for which you would qualify.
The second major requirement for qualifying for a
reverse home mortgage is you must own your home and
occupy it as your primary residence. The home must
have been your primary residence for at least half
a year. The type of home also plays an important role
in your qualification for a reverse home mortgage.
A reverse home mortgage is available for single-family
homes, buildings with one to four units, condos, and
mobile homes (the land occupied by the mobile home
must be owned). Cooperative units (Coop’s) or
public housings are not eligible for reverse home
mortgages.
The amount of the loan for which you would qualify
is determined by a combination of your age, the value
of your home and your zip code (HUD/FHA will loan
more to residents in high cost areas such as New York,
Los Angles and San Francisco). Your home need not
be paid off to qualify, but your current loan would
have to be paid off up to the amount of loan for which
you could qualify. If the loan amount you qualify
for is less than your current mortgage, you could
choose to apply later or come up with the amount of
money that you are short.
With reverse home mortgages, your income level and
repayment capabilities are not important. Employment
and credit rating is not considered in applying for
a reverse home mortgage. |
