June 6, 2011

Many of our clients have asked how reverse mortgage qualification works.

The primary considerations are your age and your home value and its location (Reverse mortgage is at times called reversible mortgage by some people).   Your credit is not a consideration, and income only needs to demonstrate an ability to pay for property taxes and homeowners insurance!    Because credit and income are not considered, a lot more possibilities are available for seniors today.

There a few things that you will need to qualify for a reverse mortgage.  You must be 62 years old and you must have some equity in your home, and have a home that qualifies for a reverse mortgage.  The amount of equity needed is determined by your age, the location of the home, and of course your home value and property type.  It is wise to contact a reverse mortgage adviser before making any decisions when it comes to calculating amount of equity needed to qualify on a reverse mortgage.  Often one reverse mortgage program may qualify you for a higher loan size than another, so sometimes you qualify for more than you think. While our instant reverse mortgage calculator online is a great tool, it is not completely accurate as interest rates and reverse mortgage loan programs change on a regular basis. If you check out our detailed reverse mortgage calculator it will give very accurate results, but requires 4 business hours for results as we do internal calculations and email you the response.

Many seniors find that the “golden years” are not as golden as they thought they would be as achieving financial freedom has become more difficult with recent losses in our economy.  Social security is usually not enough to cover the basic essentials and many have lost their pensions or savings due to the market crash.  Because FHA does not require the reverse mortgage lender to consider income other than to ensure you can pay property taxes and homeowners insurance, you can get a reverse mortgage without all of the hassle associated with a forward mortgage.   A reverse mortgage loan gives you the opportunity to have extra money each month and gives you savings, so that you can make these years truly golden.  The reverse mortgage funds can free up money for home improvements, paying off bills and even taking that cruise that you have been talking about.

Paying a mortgage payment while retired, or trying to retire, can be challenging.  Many seniors find themselves falling behind on their mortgage payment and face losing their home.  Because credit is not a factor when qualifying for a reverse mortgage you can use this tool even if you have had serious hits to your credit.  Often a reverse mortgage can actually help you save your home as a reverse mortgage can even pay off a current defaulted mortgage, even if it is currently in foreclosure.  Imagine, spending your retirement years in the home you have worked so hard to have all of these years without having to worry about a payment or losing the ownership of your home.

Property type is the final consideration in a reverse mortgage qualification.  Most reverse mortgages are backed by FHA’s HECM reverse mortgage program, meaning the property must conform to FHA guidelines.  This means the property must be owned as a primary residence- a second home or investment property will not pass qualification.  Many ask if they can go on extended vacations or be in a nursing home or medical facility for an extended period of time.  This is ok as long as the home remains your primary residence, you do not rent it out while gone, and you live in the home for at least part of each year.  Many others have asked about condominiums and PUDS that are not FHA approved.  The good news is that a property in a non FHA qualified Condo or PUD project can apply for a spot approval to get financing without getting the entire project approved.

Over the last decade reverse mortgages have become an amazing financial tool for seniors to use as they plan for their future.  Find out if you qualify today.  Call 855-473-8377 to speak to a qualified reverse mortgage adviser to find out how you can make your “golden years” much more golden.