Eligibility Requirements for Reverse Mortgages [infographic]

HomeBlogEligibility Requirements for Reverse Mortgages [infographic]

Reverse mortgages are specialty financial products that allow homeowners to convert a portion of their home equity into cash. However, not everyone is eligible for a reverse mortgage, but our team at Harbor Mortgage Company can help you figure out if you’re a potential candidate for one. Let’s take a look at some of the requirements that determine your eligibility for a reverse mortgage.

Eligibility Requirements for Reverse Mortgages

  • Age Requirements: Reverse mortgages are typically only available for homeowners who are at least 62 years of age. The older you are, the more money you may be able to borrow.
  • Homeowner Status: To qualify for a reverse mortgage on a property, the home must be your primary residence, and you must be the listed homeowner. Vacation homes or properties you rent out to others generally do not qualify.
  • Property Specifications: The property will need to meet specific criteria to qualify for a reverse mortgage. In general, it must be a single-family home or a 2 to 4-unit dwelling where the borrower uses one unit as their primary residence. Department of Housing and Urban Development (HUD) approved condominiums or manufactured homes may also be eligible.
  • Financial Stability: Prospective lenders will evaluate your creditworthiness and financial stability to determine if you will continue to be able to meet ongoing expenses like property taxes and insurance coverage.
  • Loan Balance: You should be able to pay off your existing mortgage (if you still have a balance) with the proceeds you gain from the reverse mortgage. It’s also possible to secure reverse mortgages for properties that have built a significant amount of equity.
  • Willingness to Attend Counseling: To ensure that you fully understand your reverse mortgage and all it entails, HUD requires prospective borrowers to meet with an approved counselor who can ensure they fully understand the intricacies and implications of their reverse mortgage.

Contact us today if you’re curious about reverse mortgages and whether you are eligible for one.