For many people, one of the most significant assets that is owned is their home. Because of this, and because of other economic conditions, many people consider getting a reverse mortgage to help fund their retirement. While it is a very popular financial tool, not all homes and people qualify. There are several factors that help determine whether your home is eligible for a reverse mortgage.
Primary Residence
Whether or not your home is your primary residence is the first factor that impacts whether or not your home is eligible for a reverse mortgage. A reverse mortgage is only available to people who take the loan out on their primary residence. If you have a second home, or a vacation home, then that you will not be eligible for a reverse mortgage.
Plenty of Equity
Whether or not you have plenty of equity is the second factor that impacts whether or not your home is eligible for a reverse mortgage. To get a reverse mortgage, you will need to have a significant amount of equity in your home. Depending on your age, you will need as much as 50% equity to even qualify for a small reverse mortgage loan. As you age, you may be able to get a loan with less equity.
Age of Borrower
Your age is the third factor that impacts whether or not your home is eligible for a reverse mortgage. If you are the primary owner of the home, but are under 62 years of age, you will not qualify for a reverse mortgage. If you have a co-owner and borrower on the mortgage loan, you may qualify for the reverse mortgage in some situations.
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