Who Is Eligible For A Reverse Mortgage?
Rick May explains the reverse mortgage requirements that a person must meet in order to get started.
Do you have questions about reverse mortgage eligibility?
A reverse mortgage is a financial tool designed as a form of financial relief for homeowners 62 and older. It allows seniors to stay in their home, eliminate their current mortgage payment, and access a large portion of their home equity – tax-free! Unlike traditional “forward” home loans or second mortgages, no repayment is required until the homeowner(s) no longer occupies the property as their primary residence.
Any homeowner over the age of 62 can apply for a reverse mortgage. As the borrower, you must occupy the home as your primary residence. Reverse mortgages are based on your home’s equity and there are only a few income or credit requirements. There are no health requirements.
How does a Reverse Mortgage work?
The application process is the same as any other loan. Your current loan (if you have one) will be paid off with your new reverse mortgage, totally eliminating any current mortgage payment you have! If you have additional equity, you may be able to access that money – tax-free! If your home is paid off, you can use a reverse mortgage to gain access to the equity that you have worked so hard to build. As the homeowner(s), you can choose from one of four ways to receive the additional cash from your reverse mortgage:
- As a monthly payment -wired into your account at the beginning of each month
- In one lump sum amount
- As a line of credit
- Or, any combination of the above options.
Since reverse mortgages don’t require you to make monthly payments, the mortgage amount you owe grows larger over time. It’s important to note that your home may continue to appreciate just the same as if you had a regular mortgage, increasing your home equity as time progresses.
As a Reverse Mortgage borrower, you will retain your place on the property’s title and continue to own your home. As the homeowner, you will still be responsible for property taxes, insurance and maintaining your home. No repayment is required until you no longer occupy the house.
Here’s a question to ask yourself…What could you do if your mortgage payment was eliminated, or if you had additional cash flow? Whether you just want to have more money to enjoy your life, help support a loved one or pay off other rising bills and medical expenses, a reverse mortgage can give you immediate access to your money.