There is a lot of hype and talk about home mortgages, reverse mortgages and ways to get the best deals on a current and future loan. Ever since the pandemic, the housing market has been going up and down like a garage door. So, with all of this activity the big question people are asking is, “When it comes to a reverse mortgage, what are my eligibility requirements?”
Interesting thing is that a reverse mortgage is not as simple as it sounds. There are many factors that come into play when qualifying for a reverse mortgage. One of these factors being the type of property you own!
There are different ways of qualifying for a reverse mortgage and what suits you best depends on your current situation. Some people love the fact that they can obtain a loan with little to no money down, however, there is one major drawback. After you have obtained this loan, if you should pass away before paying off the full balance owed on the loan, your heirs are responsible for paying any remaining balance off.
Many people face this problem and it is usually a major cause of stress amongst family members after the passing of a loved one. To avoid having to deal with the extensive paperwork involved in handling probate court, you may want to consider ways to estate plan your property so that your loved ones don’t run into issues.
What is a Reverse Mortgage?
A Reverse Mortgage or Home Equity Conversion Mortgage (HECM) works by using the equity in your home as collateral. The Equity in a house is the difference between its market value and what is still owed on it; like the mortgage balance, which can be paid off using this method if you are eligible for it. With a reverse mortgage you do not have to repay any money until either you sell your home.
How old do you need to be to quality?
There are not many rules or restrictions on who can get a reverse mortgage. Most lenders require you to be at least 62 years old but some will allow people to qualify as young as 55 years of age, while others require the borrower to be at least 65 if they want to obtain one.
When it comes to a reverse mortgage, you really want to get all the details and know if you will benefit in the long run or if your current situation is best.