If you are retiring or nearing retirement, there’s a good chance that you’re taking a good look at your finances. While retirement brings about a lot of great changes, there are some aspects of it that can feel a bit intimidating, including how to pay for your monthly expenses and lifestyle. While many retirees look to their savings and retirement plans, there are other options that can be considered to help make sure retirement is as great as it sounds.
One of the best options for many retirees concerned about finances is a reverse mortgage loan. Not only does this type of loan leverage the equity you already have in your home, but you can access the money when you need and how you need it – whether in a lump sum or monthly installments.
Of course, one of the biggest questions retirees have about reverse mortgages is, “How do I get one?”
Thankfully, qualifying for a reverse mortgage loan really is pretty simple.
Here’s what you need to know…
First of all, in order to qualify for a reverse mortgage you have to be at least 62 years old. If you’re married, the youngest borrower on the title must meet this age requirement. Second, qualifying for a reverse mortgage loan requires that you live in the home you’ll be using on the loan as a primary residence. The more home equity you have in your primary residence, the more money you can access via a reverse mortgage. Additionally, borrowers interested in getting a reverse mortgage loan must meet the eligibility requirements established by HUD.
If you meet the requirements for a reverse mortgage, then the amount of money you can access from your loan is based on a calculation done by the Federal Housing Administration (FHA). This calculation uses your home equity in addition to four other factors. Those four factors that will determine if you qualify and the amount of money you can access are:
- Current interest rates
- The balance on existing mortgage loans
- The age of the youngest homeowner
- Current property value
To learn more, contact a reverse mortgage professional today!