Reverse Mortgages Explained | Reverse Mortgages Explained – Are They Right For You?

A reverse mortgage can help save your home AND give you some monthly income. If you are considering a lifetime loan, knowing the requirements and specifics about reverse mortgages for seniors can help you decide on the the path that is right for you. Learn the different requirements for this type of loan can help you find out if you qualify. The requirements and specifics about reverse mortgages can vary from state to state, but there are some basic things you should know.

Requirements

• Borrowers must be at least 62-years-old
• The older you are, the more lenient requirements become
• If you have any existing mortgages, you must use the proceeds from this type of loan to pay them off before you can use the proceeds from this loan for anything else.
• After existing mortgages are paid, proceeds may be used for any purpose
• Not all types of housing qualify for this type of loan
• Some properties, (like mobile homes), must meet specific requirements in order to qualify for this loan type.
• HUD (the Department of Housing and Urban Development) approved financial counseling is required before this type of loan will be granted. Counseling may cost between $100-$125 a session.
• The lending limit for a reverse mortgage is $625,500.
• The maximum loan origination fee for this type of loan is $6,000
• Any remaining balance must be settled within one year after the passing of the borrower
• Heirs may sell or refinance the property

The amount of the proceeds available from a loan of this type varies and is determined by several factors, including the age of the borrower, the current interest rate, an appraisal of the property, any existing liens on the property, the property value, the HUD national loan limit, and any known health or safety issues on the property.

Knowing the requirements for a reverse mortgage can help you prepare for your loan search.

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