A reverse mortgage loan can be a valuable tool for retirement planning. For most people, Social Security won’t be enough and it’s important to have as many sources of income as possible when you stop working. Reverse mortgages can accomplish this, but there are several requirements that must be met before obtaining one.
Both the Federal Housing Administration and non-government financial institutions can be qualified reverse mortgages lenders. However, those who want to take advantage of a reverse mortgage opportunity must meet certain qualifications for a reverse mortgage loan, including:
- Applicants must be 62 years of age.
- Potential borrowers must either completely own their home or only have a couple of mortgage payments remaining.
- Reverse mortgage borrowers must live in the home being used as collateral.
- Borrowers must have an excellent credit history in order to qualify for reverse mortgage loans.
- All homeowners are required to sign the paperwork in order to secure the reverse mortgage.
- Primarily, single family one-unit dwellings are required to qualify for a reverse mortgage
- According to AARP, some reverse mortgage lenders have loan options available for owners of two to four unit owner-occupied dwellings, condominiums, cooperatives, planned unit developments and manufactured homes.
- During the reverse mortgage process, the homeowners are responsible for property taxes and repairs to the property as they still own their home.
If you meet all the above qualifications, a reverse mortgage may be your best chance at getting the income you need to fulfill your long-term retirement goals.
