Having some extra income to spend is always a perk, especially when it comes to personal expenses like healthcare and further paying off your mortgage. Applying and being eligible for a reverse mortgage allows you to access your home’s equity in order to pay off those financial goals you wish to finally cover. However, not everyone knows if they’re eligible to receive this particular type of mortgage. With the help of Idaho Reverse Mortgage, we wish to share with you the eligibility requirements that are needed to be met!
Once you’ve reached the age where work is no longer an option and some extra income would be appreciated, wouldn’t it be nice to achieve some of that spare cash without some sort of catch? Yes, of course, it would! But, unfortunately, there are some steps in the process. Before being able to acquire a reverse mortgage, there are some personal requirements that need to be fulfilled before being granted eligibility:
- All borrowers on the home’s title must be 62 years old or older. The older you are the more you are able to receive.
- You must be a resident in your primary home. Vacation homes and rentals are not eligible to receive this type of mortgage.
- Your home must be paid off completely or at least have 50% equity in your home before being granted eligibility. Keep in mind, if you still have some money to owe on an existing mortgage, you can still be deemed eligible.
- Meeting with a HUD-approved mortgage counselor is required prior to applying for this type of loan. This ensures that the borrowers are comfortable with the process and the loan terms.
If you have any other questions about personal requirements, feel free to call us at Idaho Reverse Mortgages! Our team is more than happy to assist you with your needs!
HECM Property Requirements
If you aren’t too familiar with reverse mortgages and who the lender is, it might help to know that this particular type of loan, insured by the U.S. Federal Government is called the Home Equity Conversion Program. This type of loan is part of the FHA’s (Federal Housing Administration) reverse mortgage program which allows homeowners to withdraw portions of their home’s equity. Within this program, certain reverse mortgage-eligible property requirements must be met:
- Single-family homes or 2-4 unit properties with one unit being occupied by you
- Manufactured homes that meet the HUD (Housing and Urban Development) requirements. Keep it noted that one of the requirements requires that your house was built after 1976.
- Condominiums that are FHA approved
We realize it feels like the requirements keep coming… but if it were easy then everybody could acquire a reverse mortgage. Do keep in mind this specific loan is meant for specific individuals, and it’s key they match the required elements. With that being said, last but not least there will be certain financial requirements that must be met if you wish to receive eligibility for a reverse mortgage:
- You must show the financial ability and willingness to meet your loan obligations.
- You may not be delinquent on any federal debt, such as federal income tax for example.
- One must agree to terms to set aside a portion of the loan or have enough money on your own to pay ongoing property charges, like property taxes and insurance.
To further clarify what this means… by meeting your loan obligations, this implies that you are financially able to pay your property taxes, insurance, and keep up with your home’s regular maintenance and repairs.
The process may feel long and tedious, but meeting these requirements must be met in order to acquire a reverse mortgage. Reverse mortgages are an excellent way to take care of those underlying financial needs but should be sought after when you have an overall retirement plan put together, not when there is a pending crisis. We understand that having extra cash in your back pocket is always helpful, and when you’re 62 or older, it comes in handy when you look to take care of your financial goals along with some healthcare issues. At Idaho Reverse Mortgage, we look to be your friend throughout this process, and hope you turn to us as your go-to for a reverse mortgage!