A reverse mortgage loan is a long-term loan where the lender pays you monthly payments, and you only pay the interest back. You don't have to make any monthly payments on the money you borrow. In exchange, you give the lender a lien on your home. When you die, sell, or move away from your home, the lender uses your home as collateral to collect from you what you borrowed. Reverse mortgage loan qualifications can vary greatly, but these are some general requirements that you must meet.
Age and Income
To qualify, you must be 62 years old or older, and your home must be your primary residence. You must have a modest income and a strong equity stake in your home. You'll also need to have no other sources of income besides Social Security or retirement benefits to achieve the best rate.
Family Size
Most reverse mortgage loan programs are for single-family residences, but multi-family homes with four or more units are eligible, too. However, the primary residence must be the home of the borrower. Likewise, condominiums and manufactured homes may qualify if they meet certain guidelines. To find out if you qualify, consult your local Department of Housing and Urban Development or the Federal Housing Administration office. They can give you a good idea of how much your home is worth.
Ability to Pay Property Taxes
Reverse mortgage loan eligibility requirements may vary depending on your circumstances. You need to demonstrate that you can afford to pay your property taxes and insurance. A reverse mortgage loan may give you greater financial flexibility, but don't take one out too soon. If you're not sure about your financial situation, you should seek the advice of a financial adviser or HUD-approved agency. The reverse mortgage process is a powerful financial planning tool, but you must know the ramifications before pursuing this option.
Opening Fee
The loan origination fee for a reverse mortgage varies from lender to lender. The FHA caps the origination fee. These fees can include appraisal fees and a third-party credit check for you and the lender. In addition to the interest rate, reverse mortgages also come with other fees, such as loan origination and servicing fees. If your income meets these criteria, you can apply for a reverse mortgage.
Obtaining a reverse mortgage loan doesn't have to be difficult. Our team at Reverse Mortgage CA will help you make this process easy and quick with the best terms and conditions. Get started today!