Requirements For Qualifying For A Reverse Mortgage Loan

Share

Reverse mortgage is a way to provide additional income to the elderly who own a home and who have retired from their employment and is aimed to help them comfortably meet their daily expenses. The main feature of this financial program is that there is no checking of credit scores because the borrower of this loan does not make monthly payments like it happens in other mortgage loans. The lender provides cash every month or in lump sum to the senior citizen by taking the house of that person as collateral. After the death of that citizen or if he moves out of the house then the house comes under the custody of the lender.

To qualify for a reverse mortgage loan program you need to fulfill the following criteria:

1. In the United States of America, the senior who wants to apply for this loan must be at least 62 years old.

2. There should not be any other mortgage payments liable on the person who wants to qualify for this loan program. For example; he or she should not have any leftover home equity payments on that house.

3. The borrower of this loan must be able to cover all the expenses of the house like utilities, insurance, taxes etc and keep it in good condition.

4. The amount of money that can be used by the senior citizen is up to $625,000 no matter what is the value of their house.

5. The borrower has to use his or her house through which he or she is getting the reverse mortgage as their primary residence and does not move out.

6. The desired candidate also has to attend the counseling sessions regarding this loan program offered by the HUD (Housing and Urban Development) Department. These sessions cost around $100 to $125 but those who have federal grants can attend them for free.

7. The house of the borrower must be a single family home. It can be of four units but one unit should be occupied by the borrower.

8. The house should also be approved by the HUD department.

9. For mobile houses, the requirements are different. Only those can be approved that have been built after 1976 and have permanent foundation.

Hence, you can see that the requirements to become eligible for reverse mortgage are not difficult. The older the senior citizen is the easier the requirements will become for him or her.

Article Source: http://EzineArticles.com/