Reverse mortgages have two main qualification criteria: you must be at least 62 years old and you must have a significant amount of equity in your home. There are some specifications that the borrower must maintain on an ongoing basis to keep the reverse mortgage loan in good standing. Mortgage conversion mortgages (HECM), the most common type of reverse mortgage loan, are a special type of mortgage loan available to homeowners age 62 and older. Understanding the above property rules helps senior homeowners be better positioned to successfully apply for a reverse mortgage.
Under FHA regulations, cooperative homeowners cannot obtain reverse mortgages because they are technically not the owners of the real estate in which they live, but rather own shares in a corporation. The non-borrowing spouse (NBS) does not bear the name of the spouse of the home and may be of any age, so he does not qualify to be a borrower with all the requirements of an HECM reverse mortgage. You must live in your home as your primary residence during the term of the reverse mortgage and be at least 62 years old. A reverse mortgage is a great way to access your home equity to supplement your income, establish a fund for difficult situations, or meet a variety of other financial goals.
Reverse mortgages allow homeowners age 62 and older to supplement their retirement income by converting a portion of their home equity into affordable cash flow. Maintaining the home, along with paying property tax and insurance and staying in the home, will ensure that the borrower is up to date with the reverse mortgage and can age on site if he so wishes. If you apply for a reverse mortgage loan when you're too young, you may run out of money when you're older and you're more likely to have lower income and higher healthcare bills. And while it's not technically a requirement to get a reverse mortgage, you'll need to pay property taxes and home insurance once you have the mortgage.
However, it's important to recognize that the initial costs of reverse mortgages are high, whether you pay them out of pocket or with the equity you own. A reverse mortgage is a way to access the equity accumulated in your home during retirement. Under the terms of the reverse mortgage, the borrower must pay annual property tax and maintain a homeowners insurance policy. Applying for and applying for a reverse mortgage loan is an important decision for senior homeowners, and it deserves time and research.
