Section 2: Am I Eligible for a Reverse Mortgage Loan

Eligibility For a Reverse Mortgage Loan

In general, a reverse mortgage is a great way to access your home's equity to supplement your income, establish a "rainy day fund" or meet a variety of other financial goals. And with its flexible repayment option, it offers homeowners greater control over their finances. As with any home-secured loan (or mortgage), you must meet your loan obligations, keep current with property taxes, insurance, maintenance, and any homeowner’s association fees. But how do you know if you are eligible for a reverse mortgage? Though, like many, you may be asking yourself, am I eligible for a reverse mortgage, is my property a reverse mortgage eligible property, or can I get a home equity loan with bad credit?

If you are interested in tapping into your home equity to get funds or an extra source of cash you can use today or to have a safety net for the future, the following requirements must be met:

• All borrowers on the home’s title must be at least 62 years old. The older you are, the more funds you can receive from a Home Equity Conversion Mortgage (HECM) reverse mortgage.
• You must live in your home as your primary residence for the life of the reverse mortgage. Vacation homes or rental properties are not eligible.
• You must own your home outright or have at least 50% equity in your home to be eligible for a reverse mortgage loan. Even if you owe some money on your existing mortgage, you may be eligible for a reverse mortgage. The funds from the reverse mortgage would first pay off your mortgage and satisfy any other eligible existing liens before you could use the funds for other things. Refinancing existing debt(s) with a reverse mortgage can help improve monthly cash flow.
• You must meet with a Department of Housing and Urban Development (HUD)-approved reverse mortgage counselor prior to applying for a reverse mortgage loan. The reverse mortgage counselor will discuss how a reverse mortgage works and the associated costs. The goal of the counseling session is to make sure that potential borrowers fully understand and are comfortable with the process and the loan terms.

*Don’t meet the minimum requirements? You still may be eligible: talk with an Orbit Home Loan specialist today.  (CLICK)

Down Payments

Although there are some fees associated with a reverse mortgage it is important to remember that this is not a purchase so there is not a down payment. 

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Documents Your Lender May Require
- W2s
- Bank Statements
- Pay Stubs
- Asset Statements
- Liability Statements
- Legal ID

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 Reverse Mortgage Lender Requirements 

Credit and Income

There is no minimum credit score requirement for a reverse mortgage, primarily because the main thing lenders want to know is whether you can handle the ongoing expenses required to maintain the house. Lenders will, however, look to see if you're delinquent on any federal debt.

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How to Apply for a Conventional Loan
Get started today with one of the best and most secure ways possible. Here are Orbit Home Loans we have a trusted team ready to help you find your dream home. Talk with you trusted Orbit Home Loans broker that knows conventional loans and how to get the most from this hard-earned benefit. The process typically starts with getting pre-approved, which can often be done in minutes using your phone, laptop or tablet. 

Loan pre-approval is a key first step before making an offer on your dream home. Having that pre-approval letter gives you a clear sense of your buying power and shows sellers and listing agents you have what it takes to get to closing. 

 

Questions about whether you qualify? (CLICK)