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How To Qualify For A Reverse Mortgage
How To Qualify For A Reverse Mortgage
As of 2015
qualifying for a reverse mortgage
has become similar to that of a regular conventional or "regular: FHA loan, but there are a few differences.
Income documentation is now needed.
Documentation of being able to pay property taxes and homeowners insurance premiums is now paramount.
Credit scores do not carry quite as much weight as forward FHA and Conventional mortgages,
but they are now considered as part of the qualifying process.
Collection accounts must now be explained and dealt with.
Depending on the ability and willingness to repay these accounts if there's an existing balance owed on a collection account, the non-payment of this debt may determine if the lender will have to set aside a portion of equity (on a refinance HECM) to pay your property taxes and homeowners insurance. When
using a Reverse Mortgage to buy a home
, a higher down payment may be needed than the norm. There may be exceptions to this rule.
to see the dollar amount you may qualify for on a
HECM Reverse Mortgage refinance
Equity in the property is key.
On a refinance (a home you currently live in) equity, the borrowers age, and current interest rates are among the factors that determine how much in
Reverse Mortgage refinance
funds are available, each scenario is unique in it's own way.
The same holds true when you use the
Reverse Mortgage to purchase a home
. Down payment, the borrowers ages and prevailing interest rates are among the factors that determine the dollar amount.
for information on
how to buy a home using a Reverse Mortgage
The property must be your owner occupied property.
Per HUD guidelines, no investment properties allowed however, you may purchase a 1-4 unit building as long as you live in one of the units (lender must approve the circumstances).
Borrower on loan must be at least age 62, spouses younger than 62 also can not go on title or the loan, and may reside in the property.
This is a new law for new loans going forward. If there is a spouse younger than 62, than available funds will be reduced, and they may reside in the property as their principal residence for as long as they like, however they will have no access to Reverse Mortgage funds.
Liquid assets are not required but can help the application
. If there are liquid assets in the household, there may or may not be documentation required to prove their existence. It depends on how much residual income is left over after monthly living expenses have been paid. This is determined by the lender.
If there are rental properties, the borrower will have to prove they have the monthly income with documentation that they have ample funds to cover all expenses for all properties. Ample income will be deemed by the lender.
All in all, the reverse mortgage loan process has recently created protections for seniors looking to obtain a reverse mortgage, and even though there is more documentation required than before it's in the best interest for all involved.
Also know that there is independent third party loan counseling by a government approved non-lender affiliated person. This counseling is done before the loan process and heirs are encouraged to be on the phone call to ask questions.
The Reverse Mortgage Loan Originator is not allowed to be on the phone call, this allows for a no sales pressure type of environment. The loan process can not move forward without this counseling and issued certificate showing the counseling has been done, and must be paid for by the borrower, usually $100.00 or so via credit card.
Feel free to visit my
Reverse Mortgage blog
, by clicking on the blue link, where there are educational videos and articles for you to peruse.
I welcome any questions or concerns regarding the
California Reverse Mortgage
Feel free to give Kevin Walton, Certified Loan Advisor with C2 Financial Corporation. Cell: 800-506-0632 ext. 0 I'm here to help!