If you are at least 62 years of age, own your home, or have a low mortgage balance, you can qualify for a reverse mortgage.
Qualifying for a Reverse Mortgage
A homeowner or homeowners must be at least 62 years of age or older to qualify for this type of home equity conversion mortgage. The home should be mortgage free, or have a low mortgage balance that will be paid off with part of the proceeds from the reverse mortgage. The homeowners must live in their home as their primary residence, and pay for property insurance, taxes, and routine home repairs to be eligible for this type of mortgage.
Homes that Qualify for a Reverse Mortgage
Single family dwellings, condominiums, multi family 1-4 unit homes, with the borrower living in one unit, and approved manufactured homes are all eligible for a reverse mortgage. This is an FHA sponsored loan and all homes are expected to meet FHA requirements for approved housing.
Receiving Equity Payments from a Reverse Mortgage
The home’s equity will be disbursed to the homeowner’s in one of the approved methods of payment as outlined in the reverse mortgage agreement. Borrowers will have the option of receiving monthly payments, establishing a line of credit, or receiving one lump sum payment. The equity disbursements serve as supplemental income that can be used as the homeowner’s see fit. Many borrowers choose to pay off bills, travel, or make home repairs and improvements with this money.
Benefits of a Reverse Mortgage
Senior homeowners are enjoying the financial freedom that a reverse mortgage offers. Living on fixed incomes cannot cover the rising health care bills associated with aging. Customary living expenses are increasing while incomes remain fixed with retirees. Receiving additional income takes the worry out of adequately funding years of retirement.
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