Reverse mortgages can be a lifesaver for seniors age 62+ facing home foreclosure. Find out how reverse mortgages work in avoiding home foreclosure.
Key Requirements for Reverse Mortgages
Age is the first key requirement in determining eligibility for reverse mortgages. The homeowner must be age 62 or older. Other key requirements include primary residence, property value, and home equity. The property must be the homeowner’s primary residence. Adequate property value and ample home equity are essential to satisfy the mortgage debt and to be an effective tool in avoiding home foreclosure.
Eligible Properties for Reverse Mortgages
Eligible properties for reverse mortgages must be approved as determined by the Federal Housing Administration (FHA), such as, a single family homes, townhouses, or condominiums. No part of the home or land may be rented. Vacation homes, second homes, and mobile homes, not on permanent foundations, are examples of ineligible properties. Each property must pass an FHA inspection, and all necessary repairs completed to meet FHA standards.
Application Process in Avoiding Home Foreclosure
When foreclosure is imminent, “time is of the essence” when applying for reverse mortgages. The application and approval process takes more time. In many instances, the homeowner will need a “short pay agreement,“ in which the mortgage lender reduces the balance owed on the existing loan. The homeowner should select a reverse mortgage specialist to assist with lender negotiations and entire application process.
Mortgage Free For the Future
Once the loan is approved, the homeowner receives a lump sum payment, which will be used to pay the mortgage in full. The threat of foreclosure is gone. The homeowner can stay in the home for a lifetime, retain title to the home, and be mortgage free for the future. No payments, no mortgage debt — what a bright future that is!
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