Reverse Mortgage Borrower Qualification
Edited by Harry Jensen
The borrower must be at least 62 years old- If two people own a property jointly then the age of the youngest individual on the property title is used to determine borrower eligibility for the reverse mortgage
You must live in the property for which you are getting a reverse mortgage- In some cases people use a reverse mortgage to purchase a new property to move into. In this case you have to have enough money to pay for the difference between the amount you receive from the reverse mortgage and the price of the property
You must be able to afford non-mortgage housing expenses such as property taxes, homeowners insurance and homeowners association (HOA) fees- The lender may verify that you have the ability to pay these housing expenses. Failure to pay these expenses can result in default or foreclosure and you losing the property
You should own your home free and clear or have a low mortgage balance- You are required to pay off any existing mortgage balance you have on the property with the proceeds of the reverse mortgage so the lower your existing mortgage balance, the more money you receive from the reverse mortgage
You must live in an approved property- The borrower must live in a single-family property or live in one unit of a two -to-four unit property
- It is important to highlight that if you live in a condominium, only HUD-approved condominiums are eligible for the reverse mortgage program
Complete a government approved reverse mortgage counseling class- You must complete a reverse mortgage class offered by a government-approved counselor. The class typically costs $100 - $175
- Certain HUD-approved reverse mortgage counselors use HUD grants to offer counseling classes for free. Free reverse mortgage counseling classes save the borrower money but may take more time to find and complete due to greater borrower demandAbout the author
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