Guide To Reverse Mortgage Qualifications

General Reverse Mortgage Qualifications

The most basic reverse mortgage qualifications include the following:

• You must be at least 62 years old. Age is one of the key reverse mortgage qualifications. Reverse mortgages are only available to seniors 62 years or older.
• You must own your own home. You must have the title to your home, and either own your home outright or have a low enough mortgage balance to be paid off with the reverse mortgage loan.
• Your home must be your primary residence. Borrowers must live in the home and cannot live elsewhere for more than 12 consecutive months.
• You must complete a HUD-approved counseling session. The Department of Housing and Urban Development (HUD) provides a list of agencies that provide counseling to discuss options with borrowers prior to closing.

Reverse Mortgage Home Qualifications

In order for a home to qualify for a reverse mortgage:

• The home must be a single-family home or a multiple-family home (of less than 4-units) where the borrower lives in one of the units.
• A manufactured home may qualify if it meets Federal Housing Administration (FHA) requirements.
• A condominium may qualify if it meets HUD requirements.
• Certain homes do not meet the federal reverse mortgage qualifications:
• Second homes and vacation homes do not meet the reverse mortgage qualifications, as they are not primary residences.
• Homes on income-producing properties such as farmlands do not meet the reverse mortgage qualifications.

Financial Qualifications

In order to qualify for a reverse mortgage:

• You must be able to pay your property taxes, insurance, fees, Home Owner’s Association (HOA) fees, and any home maintenance expenses over the life of your loan.
• You must be current on any federal debt and taxes. In some cases, the proceeds from a reverse mortgage may be used to pay outstanding taxes.

Reverse Mortgage Qualifications FAQs

Can a homeowner who already has a mortgage qualify for a reverse mortgage?
Yes, having a mortgage does not adversely impact a borrower’s reverse mortgage qualifications. In fact, many borrowers use the proceeds from a reverse mortgage to pay off their primary mortgage, eliminating monthly mortgage payments.

Does every homeowner over age 62 qualify?
No, there are additional factors other than age that are considered in reverse mortgage qualifications. For example, a homeowner may not have enough equity in their home to qualify, or they may not spend enough time in the home for it to be considered their primary residence.

What if there is not enough equity in the house to qualify?
A “shortfall” exists when there is not enough equity in a house to cover the existing mortgages on the home. In this case, the homeowner cannot qualify for a reverse mortgage loan until the balance of the existing mortgage is lowered or paid off. The borrower can “pay down” the mortgage balance to increase equity and satisfy the reverse mortgage qualifications.

Learn More About Reverse Mortgage Qualifications

If you need help evaluating the reverse mortgage eligibility qualifications to find out if you qualify for a reverse mortgage loans, Citizens Lending Group is here to help. Contact us online or by phone for a consultation, or learn more by checking out our reverse mortgage calculator online.