If you are homeowners and are over the age of 62, you just might. Some things to know in order to determine whether or not you are eligible. First - do you have enough equity? The amount of money you can borrower on a reverse depends upon 3 things.
It is not the normal 80% of home value, more like 50 to 70 percent. Once you know if you have age and equity on your side, then you need to look to the home itself.
- Age of Youngest Borrower.
- Expected Rate
- Lesser of the Home Value or FHA Lending Limit. (Currently at $625,500.00, but may be lowered October 1)
- Single Family homes in good condition.
- Some FHA Approved Condos.
- Some reverse mortgage lenders will loan on Manufactured Homes on owned real property with a permanent foundation.
Next, take a look at how you hold title. Are you in a trust? Most, but not all trusts do qualify for a reverse mortgage, however the lender and title company will want to review it before issuing your loan.
What about your credit? Though income and credit score is not an issue, if you have a tax default, federal debt or another FHA loan there may have some hurdles.
It's also a good idea to self check your income... do you have enough income to keep up with the property taxes, homeowners insurance and maintenance on the home. It's never a good idea to delay the inevitable. If you need to bite the bullet and sell, I'd suggest that you do that rather than have your existing equity eaten away with interest and deferred maintenance. Sorry to be so blunt, but your quality of life is important to me.
If you have more questions, I’d be happy to discuss it in more detail. You can also talk with aHUD Approved HECM Counselor. Your questions and comments are encouraged! If you’d like to ask me a question you can enter into “Comments” or email me at the link to the right.
By Deborah Nance
Your Local Southern California Reverse Mortgage Professional