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Reverse mortgage qualifications, How do i qualify for a reverse mortgage? Updated 2016 HECM Qualifications

Wondering what it takes to qualify for an HECM reverse mortgage?

HECM stands for Home Equity Conversion Mortgage.the FHA insured reverse mortgage (HECM) makes up 95% of the market. Seniors are leveraging this program due to the fact it is easier to qualify vs. a traditional mortgage; they can access the equity without a new mortgage payment, and maintain ownership of the home.

HECM loans also called reverse mortgages makes up 95% of the market, these are all FHA insured loans. Seniors are utilizing this program more and more every year due to the fact it is easier to qualify vs. a traditional mortgage; they can access the equity without a new mortgage payment, and maintain ownership of the home.

Before finding out if you are qualified why not consider the pros and cons of the program to make sure it’s a good fit for your retirement.

Reverse mortgages are a good fit if:

  • You plan on living in this home for long term.
  • You are financially fit to pay for taxes, expenses, and homeowners insurance.
  • You understand that the loan will accrue interest meaning you will owe more the longer you keep the loan.
  • Are trying to eliminate a current debt or mortgage payment.

Reverse mortgages are not designed for:

  • Short term financing since the fees are high.
  • If you plan on moving in the next 5yr.
  • Are uncertain about your health and could potentially need care.

To be eligible for an HECM you must:

  • Be 62 years of age or older (at least one borrower on the title).
  • Demonstrate the ability to upkeep with repairs, property taxes and insurance.
  • Have a certain amount of income and credit scores.
  • The property must be your primary residence (no vacation/investment homes).
  • The property must meet FHA guidelines being a single family or multi-unit with owner occupying one of the units (max of 4 units). Manufactured homes do qualify as well under more conditions.
  • Attend and pay for a counseling session is mandatory.
  • Pay appraisal fee to determine property value; this is with all lenders, some can credit this fee back at closing.