You must be at least
62 and own your own home or condominium in order to qualify
for a reverse mortgage. There are no income or credit
requirements to qualify. Based on the amount of benefit, which
you qualify for, you may be eligible for a reverse mortgage
even if you still owe money on your first mortgage.
As a practical matter, the best candidates for these loans
are retirees in their 70s or 80s.
There are two
primary reverse mortgage loan products available, the
FHA, HECM (Home Equity Conversion Mortgage) and
the Fannie Mae HomeKeeper. Another benefit of these loans is that they
are "non recourse" which means that no matter how high the
loan balance grows, the borrower or their heirs never owe more
than the home's market value.
The proceeds from a
reverse mortgage can be used for anything: daily living
expenses; home repairs and home improvements; medical bills
and prescription drugs; pay-off of existing debts; education;
travel; long-term health care; retirement and estate tax
planning; and other needs you may have.
from a reverse mortgage are available as a lump sum, fixed
monthly payments for as long as you live in the property, a
line of credit; or a combination of these options.
amount of benefit that you will qualify for, will depend on
your age at the time you apply for the loan, the type of
reverse mortgage you choose, the value of your home, current
interest rates, and for some products, where you live. As a
general rule, the older you are and the greater your equity,
the larger the reverse mortgage benefit will be.
costs associated with getting a reverse mortgage are similar
to those with a conventional mortgage, such as the origination
fee, appraisal and inspection fees, title policy, mortgage
insurance and other normal closing costs. With a reverse
mortgage, all of these costs can be financed as part of the