Can anyone apply for a reverse mortgage loan?
No – there are certain requirements you must meet in order to be eligible for a reverse mortgage:
- You must be at least 62 years old.
- The home must be your primary residence.
- You must have paid off some or all of your traditional mortgage.
If you want to get a reverse mortgage and you still owe money on a traditional mortgage, you must use part of the money from the reverse mortgage to pay off the traditional mortgage. There are limits on how much money you can get from a reverse mortgage, so if you have a high traditional mortgage balance, you might not qualify for a reverse mortgage.
Most reverse mortgages today are insured by the Federal Housing Administration (FHA) through its Home Equity Conversion Mortgage (HECM) program. This program requires that you meet with a reverse mortgage counselor approved by the U.S. Department of Housing and Urban Development (HUD) to discuss how a reverse mortgage works and how much it will cost you. FHA also requires that your home be in good shape. If your home is poorly maintained, you may need to repair it before you can get a HECM reverse mortgage.
If you have a spouse or other relatives living with you, think very carefully before applying for a reverse mortgage. Couples can apply together as co-borrowers, and for most couples this is the best choice if they decided to pursue a reverse mortgage. When couples are listed as co-borrowers on their reverse mortgage, one spouse can continue to live in the home even if the other spouse dies or has to move to a nursing home. Unmarried couples, siblings, etc, can also apply together as co-borrowers and receive the same rights, as long as both people are over age 62. People who live in the house and are not co-borrowers will probably have to move when the borrower dies or moves out, since the home will usually be sold at that time to pay off the reverse mortgage.