Reverse Mortgage Rules %26 requirements You must be 62 years of age or older, you must own your home, you must own your home directly or have a substantial amount of capital, you must live in the house as your primary residence, you must complete a financial evaluation. If there is more than one borrower and no eligible non-borrower spouse, the age of the youngest borrower is used to determine the amount you can borrow. Department of Housing and Urban Development. Reverse mortgages were intended to help seniors who were retiring or approaching.
Because of this, the age requirement for the reverse mortgage is 62 years or older. You must be at least 62 years old to get a reverse mortgage. The Department of Housing and Urban Development (HUD) requires that you receive HUD-approved reverse mortgage counseling. The closing costs and interest rates of home equity loans and HELOCs also tend to be significantly lower than what you'll find with a reverse mortgage.
Understanding the above property rules helps older homeowners better position themselves to successfully apply for a reverse mortgage. For example, some sellers may try to sell you things like home improvement services, but then suggest a reverse mortgage as an easy way to pay for them. The Federal Housing Administration (FHA) created one of the first types of reverse mortgages, called the Home Equity Conversion Mortgage (HECM). It is strongly recommended that you proceed with caution if you are considering applying for a reverse mortgage.
The loan proceeds you receive from the reverse mortgage first pay off your existing mortgage, if you have one, and the remaining money can be used as you wish. If you are 62 but your spouse is not the required age for the reverse mortgage, you can still get an HECM, but your spouse will be considered a non-borrowing spouse and will not have access to your loan income. Private lenders may offer their own reverse mortgage products, but the following guidelines apply to HECM loans. In addition to the potential for scams targeting seniors, reverse mortgages have some legitimate risks.
Rates and charges can vary widely among lenders; the federal government does not set reverse mortgage rates. While reverse mortgages don't have income or credit rating requirements, they do have rules about who qualifies. Some homeowners should also be prepared to set aside a portion of their reverse mortgage funds for ongoing property costs, depending on the results of the required financial assessment. Learn more about the elusive single-purpose reverse mortgage that boasts lower interest rates and fees for a lump sum advance to keep your home.
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