Reverse mortgages are a good choice if you meet the following requirements:
- Are over 62 ½ years old. Reverse mortgages require everyone living in the home (not just those on the loan) to be over 62 ½ years old.
- Have a large down payment. Reverse mortgages require you to have a sizeable down payment (or equity). The exact amount of the down payment is dependent on the price of the home and the age of the residents.
- Have some minimum income. Although there aren’t payments associated with a reverse mortgage, borrowers do need to have enough income to cover the taxes, insurance, and HOA dues (if applicable) for the home.
A few reverse mortgage facts:
- Not your grandmother’s reverse mortgage. Reverse mortgages of today are very different from reverse mortgages of the past. They no longer have a “due” clause. The borrowers can live in the home until death without making payments. Once they pass away, the heirs have one year to sell the home and pay off the loan and they can have any equity left in the property. If the home is upside down or without equity, the heirs can walk away from the home without penalty or they can purchase the property for market value.
- You must live in the property. Borrowers are required to live in the home. If it is discovered that you are not living in the property for more than a year, it can cause the loan to become due in full immediately.
- Reverse mortgages are an FHA product with sizeable fees. Reverse mortgages are a good choice for your final residence but come with hefty fees. It’s not advisable to get a reverse mortgage on a property you want to eventually sell or move out of.
Please consult one of our friendly loan officers today to help you determine which loan option is the best for your particular situation! We’ll do our best to be “The Bright Spot in Mortgage Lending!”