Eligibility Requirements for a Reverse Mortgage

Getting a reverse mortgage can be a great way to create a regular source of income for yourself during retirement years. However, not everyone is eligible to participate in the reverse mortgage program. Here are the eligibility requirements that you will have to meet in order to get a reverse mortgage.

Age

In order to get a reverse mortgage, you will first have to meet the age requirements. You will have to be at least 62 years old in order to gain access to this program. That age limit applies to both you and your spouse. If you are old enough but your spouse is not 62, you will have to wait until your spouse turns 62 to get involved in the program.

Credit and Income

The reverse mortgage does not have your typical credit or income requirements for a mortgage. In fact, there are no income guidelines or credit score requirements in order to qualify for this type of program. Since the lender is going to be paying you a monthly payment, it does not necessarily matter how much money you make or how good your credit score is.

Residence

In order to qualify for this program, your residence will have to meet certain requirements as well. First of all, this has to be your primary residence in order for you to refinance. You cannot be working with a vacation or rental home in this program. The property can be either a freestanding house, a condominium, a manufactured home, or even a multifamily unit. If it is a multifamily unit, it has to be a building that has between two and four units. You also have to reside in one of those units as your primary residence.

Mortgage

Ideally, you should own a house without any mortgage balance against it. However, you may be able to qualify for the program even if you do have a mortgage balance. In this case, you should have a very small existing mortgage balance that can be paid off with funds from the reverse mortgage.

Counseling

Before you can get your reverse mortgage loan, you will have to go through an informational session. This session will provide you with valuable information about the reverse mortgage process. They will also look at your individual financial situation and tell you how much money you will be able to borrow with this program. Your session has to be administered by an FHA approved counselor.

Home Value

The value of the home is going to play a role in this process as well. In order to determine the amount of the loan, the FHA is going to look at 2 different numbers. They will give you the lesser of the 2 amounts between the value of your house and the FHA maximum loan limit. This means that if you have a very large house with a value of more than the maximum loan amount, you will not be able to borrow the full value of your home.

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