A reverse mortgage is an opportunity for seniors to convert their homes into cash based on the value of its equity. This process is tax-free besides ensuring that the owner retains the house. Despite living in the house on ‘loan’, you will not be required to pay any monthly premium. The repayments are usually deferred until the borrower leaves the house. At this point, the amount due will have to be paid in full, including the financed closing cost and interest.
Who Qualifies for Reverse Mortgage?
•The borrower must be 62 years or older.
•They must be using the house as their primary residence.
•The borrower must also attend a compulsory information and counseling session.
•The property in question must also have met stipulated FHA standards.
•The home must also be maintained with necessary taxes, repairs, and insurance.
In case a home has an existing mortgage, it must be low enough such that it can be offset using the gains from a reverse mortgage. The counseling session is either conducted face to face or through a telephone conversation. For properties that are jointly owned, all persons must make the application, attend the sessions and append their signatures on loan papers.
What Types of Properties Are Eligible?
There are properties on which you can take the reverse mortgage, while on others; your application will be declined. Check the list below to see whether your property qualifies.
•One unit dwellings for single families
•2-4 units that are occupied by the owner
•Planned units developments and condominiums. For specifications, one should contact the lender since some do not qualify.
•Manufactured homes. Some of these homes also qualify but it always depends on the terms of ownership and decision by the lender.
There are instances where co-operatives and mobile homes also qualify, each case is treated individually. By engaging a reverse mortgage consultant and attending the counseling sessions, you will have a better idea and understanding of whether your property qualifies.
The amount you qualify for differs from one house to the other. It is determined by among other factors your age or that of the youngest borrower, prevailing interest rates in the market and the lesser between the appraisal value and limit on FHA insurance.
You will get a personalized review. The information provided by reverse mortgage consultant enables you to make a favorable decision.
