For the most part, the following criteria needs to be met in order to qualify for a Reverse Mortgage.
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Qualification Factors for a Reverse Mortgage
- Borrowers on Title must be age 62 or older
- Home must be used as your Primary Residence
- Home can be a Single Family Detached Residence, FHA Approved Condominium or Townhome, PUD, Multi Family Dwelling (Must reside in one unit) and some Manufactured Homes
- Home must have significant equity, typically at least 40%
- You may have a current Mortgage on the property, it will be paid off with the Reverse Mortgage
- Property Taxes and Homeowners’ Insurance must be kept current
- Property must be in marketable condition. (Cannot have peeling paint, broken windows, visible significant repair issues or other health and safety hazards)
What if my spouse is not yet 62 years of age?
Excellent question. Only those borrowers that are 62 years of age or older can be on title when you get a Reverse Mortgage. What this means is that you need to have a conversation with your Reverse Mortgage Professional on what your options are when dealing with this issue. You need to understand the possible effect of not having your spouse on title in the even that you predeceased him/her. Your Reverse Mortgage Professional should be able to offer advice on how to protect yourself from any problems arising from this.
I have a Mortgage on my property. Can I still get a Reverse Mortgage?
Yes. As long as you have enough equity to cover the payoff of your current Mortgage, you can get a Reverse Mortgage. The Reverse Mortgage will be used to pay off your current Mortgage, and any remaining funds will be available for you to use.
I have some repair issues with my home. Will this prevent me from getting a Reverse Mortgage?
Most likely not. However, it will depend on the nature of the repair issues. For instance, FHA requires that there be no peeling paint on your home, no broken windows, no obvious health and/or safety hazards, etc. If any of these do exist, it is possible to set aside money from the Reverse Mortgage to pay for the repair of these issues after your Reverse Mortgage funds. If there is a major issue such as a bad or leaking roof, it may have to be repaired prior to your Reverse Mortgage funding. Speak to your Reverse Mortgage Professional if you feel you have some repair issues. They can be worked through.
Considering a Reverse Mortgage is a big step and you owe it to yourself to have all the facts and educated yourself as much as possible. If you have any questions about anything in this article, please feel free to contact me at 714-455-9150. If any of your family members have concerns, I welcome them to call me as well. Good luck in your endeavors.