How do reverse mortgages work if I have bad credit? Does applying for a reverse mortgage require a good credit score? Are reverse mortgages credit based?
A reverse mortgage is not based on your credit. A reverse mortgage can be obtained by anyone who meets the guidelines set forth by the government, regardless of their credit situation. To receive a reverse mortgage you must be at least 62 years of age. You must have a very low mortgage on your home or the home is completely paid off. You must have sufficient equity available in the home. The home must be your main residence and be occupied by the borrower on a full time basis.
Does applying for a reverse mortgage require a good credit score?
When you apply for a reverse mortgage you will not be asked your credit score nor will you be required to have a credit check. The loan is based solely on the equity in your home. The home itself is used as collateral for the loan so your credit history is not taken into consideration. However, delinquent taxes can prevent you from getting a reverse mortgage. If you have past due taxes or tax liens against your house, these must be satisfied prior to receiving any money from a reverse mortgage.
Are reverse mortgages credit based?
A reverse mortgage is not granted on basis of credit standing. Since this type of loan is a collateralized loan, anyone who meets the requirements can apply for, and receive, a reverse mortgage. Reverse mortgage amounts are based on the amount of equity available in your home. The type of payments you receive is based on your current age and your life expectancy. Once all requirements of age, residence and equity are met, the borrower can process a reverse mortgage regardless of credit history.
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