Reverse mortgages can be an excellent option for homeowners who are in need of a little bit of extra money to help pay their bills or to maintain a better quality of life. The way reverse mortgages work is relatively simple — it’s essentially a loan taking out against the equity the owner has in their home. This means that instead of making mortgage payments to their lender every month, their lender makes payments to them. However, if you’re interested in taking out a reverse mortgage, then you’ll need to be aware of what the requirements are in order to be ruled eligible.
Requirements of a Reverse Mortgage Loan
The following are the main requirements that you will need to meet in order to be eligible to take out a reverse mortgage loan on your home:
- You have to be at least 62 years old – Reverse mortgages were designed specifically to help senior citizens, which means that you have to be at least 62 years old to qualify.
- You have to be the owner of your home – You need to be on the title of the home, which means you must either own the house outright or the balance on your remaining mortgage is low enough that you can pay it off using your reverse mortgage loan.
- Your home must be your primary residence – One of the main goals of the loan’s creation was to help seniors stay in their homes, which means that the house you’re taking a reverse mortgage loan on must be your primary residence.
- Your home generally has to be a single-family home – Generally speaking, your home must be a single-family home or a four-unit maximum multiple family home in which you occupy one of the units. If your home is a manufactured house, it must meet FHA requirements. If it’s a condo, it must be HUD-approved.
- You must be up-to-date on your home finances – You can’t be behind on any property taxes, homeowner’s insurance or HOA fees.
- You cannot be behind on federal debt – You must be up-to-date on all federal debts.
- You have to complete a counseling session – To be approved for a reverse mortgage loan, you will first need to attend a counseling session with a HUD-approved agency.
These are the main requirements for eligibility when it comes to reverse mortgage loans. To find out more about reverse mortgage loans, contact us at the Alliance Mortgage Group today.