Your City, Your State Reverse Mortgage Eligibility
Reverse Mortgage eligibility requirements are reasonable and easy to meet for those interested in reverse mortgages in Your City, Your State.
In order to qualify for a HUD HECM Reverse Mortgage, there are some basic eligibility requirements that the following pages cover for you. Reverse mortgages require that you are at least 62 years of age, occupy the home as a primary residence, as well as a few other eligibility requirements.
Your City, Your State Reverse Mortgage Qualifications
In order to meet FHA reverse mortgage guidelines, you cannot take a reverse mortgage out on a home that is not resided in by you, nor will the reverse mortgage payments continue if this isn't your primary residence. Lastly, your home must be in good condition and you must maintain the homes condition over the time you are receiving payments from a reverse mortgage.
If you move out of your residence to live in a nursing home, with a family member, etc., the term of your reverse mortgage loan will cease and you will be required to begin paying off the reverse mortgage immediately.
Reverse mortgage guidelines state that in order to qualify for a reverse mortgage loan, the home must be one of the following:
- Single-family home
- 2-4 unit property
- HUD-Approved Condominium
- Manufactured homes built after June 1976
Again, the property must be a permanent resident for the borrower. This means that vacation homes, rental homes, etc. are ineligible for a reverse mortgage. The only time a rental home is eligible is when the home is a multi-unit home and the owner resides in one of the units.
Manufactured homes are only eligible is they are built after June of 1976 and are permanently affixed to an FHA approved lot of land. Condominiums and town homes are eligible only if they are owned outright by the borrower.
The maximum loan amount is currently $625,500. However, different variables are considered when calculating how much a borrower can receive under a reverse mortgage. Some of these variables include:
- Borrowers age (if more than one borrower, the youngest age will be used)
- Your homes current appraisal value
- Your mortgages current interest rates
Your current mortgage must be current and the payment history must reflect that no late payments have been made in the last two years. Your State Borrowers who have filed for bankruptcy in the past two years may not be eligible. Borrower's who have had a foreclosure may need to wait up to three years before applying for a reverse mortgage.
It is important to speak with an independent counselor from a HUD approved agency in Your City, Your State during the reverse mortgage process if you have any of the above situations as there may be ways around it.
The normal loan-to-value ratios that help Your City, Your State lenders determine the risk of lending to a potential borrower are not used in reverse mortgages.
Instead they use TALC Total Annual Loan Cost to project the annual average cost of the loan. The TALC and the age of the borrower helps determine how much money will be loaned and paid out.
A couple of important factors to take into consideration are:
- The older the age of the youngest applicant, the more you will receive.
- The more valuable the home is, the more cash you may be eligible for from a Reverse Mortgage.
- The higher the interest rate on the HUD HECM Reverse Mortgage, the lower your cash payout could be.
In order to determine how much you would be eligible for, it is wise to seek out an online reverse mortgage calculator or speak with your independent counselor from a HUD approved agency to obtain more information about reverse mortgages.
The Reverse Mortgage process requires that some documents be submitted before the underwriting process can begin. Some of the documents required are:
- HECM Counseling Certificate (reverse mortgages require that the borrower complete HECM counseling)
- Photo ID (State ID, Driver's License, or Passport)
- Social Security Card/Medicare Card
- Homeowner's Insurance Policy
- Latest equity/mortgage line loan statement
- Death Certificate (if deceased spouse is on the deed)
- Marriage Certificate/Birth Certificate (if several last names are listed)
- Property Tax Bill (certain lenders may require this)
- Power of Attorney (copy of trust agreement or guardianship)
The Reverse Mortgage requires that borrowers need to be at least 62 years of age. Reverse mortgages are made to help alleviate the stress on people nearing retirement. Additionally, HUD HECM Reverse Mortgages help these people get out of debt and afford the things that they may need during retirement.
Your home is an asset and Reverse Mortgages allow you to access the equity on your home. A Reverse Mortgage does not need to be repaid until the last borrower leaves the residence (in death or to leave for a nursing home, etc.).
Age has an effect on how much the borrower will be eligible to receive. The older the borrower, the more they can borrow against their home.
Reverse mortgage eligibility requirements state that all Reverse Mortgage applicants are required to complete HUD HECM Reverse Mortgage counseling before the application process begins. A certificate of completion will be required for the underwriting department to complete the terms of the reverse mortgage.
Counseling will ensure that you know all of the information on Your City, Your State Reverse Mortgages that you need to know before the application process begins. Counseling will go over all of the details of a reverse mortgage including how you can receive your payments, the circumstances in which repayment must begin, the requirements expected of you, etc.
For example, many Reverse Mortgage borrowers may not be aware that if they decide to move into a nursing home, they are no longer eligible to receive payments from a Reverse mortgage. The home must be the borrower's permanent residence.