What does a home need to qualify for a Reverse Mortgage? Will your home be eligible? Find out the requirements that have to be met to qualify.
If you are considering getting a Reverse Mortgage, there are some requirements that must be met for your home to be considered eligible. There are a few things to consider when making this decision. If your home does qualify you will need to know some information about this type of financing.
How does a Reverse Mortgage work?
A Reverse Mortgage uses the equity you have accumulated in your home. All the time you have been making payments on your house, you have been storing up equity. You can then use this equity to obtain a cash loan to use for whatever you like. You do not have to repay the loan as long as you keep the home and use it as your primary residence. This type of loan is very appealing for the obvious reasons.
What requirements are there for a home to qualify?
To be eligible the homeowner must have reached the age of sixty-two years old. The home must be owned out right, or at least only owing a small amount on the balance that would be paid for by the loan. The home must be a single family dwelling or a duplex with the owner living in one unit.
What are the limitations on this type of loan?
The borrower must live in the property and the amount borrowed cannot exceed the value of the home. If the borrower ever sells the home, he becomes responsible to repay the loan amount.
What factors determine if you are approved for a loan?
The lender will look at your age, the value of your home and the current interest rates in the area to determine eligibility and the amount of money you are eligible for.
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