Are you eligible for a reverse mortgage?

If you are living on fixed income with home equity as your only asset and need additional funds on a regular basis, you may be the right person to look out for reverse mortgages. However, make sure that you don't want to leave much of the property to your heirs.

Reverse mortgages require you to satisfy the criteria as given below:

Borrower's profile:

• You and your co-borrower, if any, should be aged 62 years or above.


• You should be the owner of the property against which you intend taking the reverse mortgage.


• You should occupy the property as your primary residence.


• There should be enough equity in your home.


• If there are past debts on your home, pay them off prior to taking out the loan or else pay them off right after you get the loan funds.

Property type:

• 1 unit single family dwelling


• 2-4 unit owner occupied dwelling


• Condominiums and townhomes


• Planned unit developments (PUDs)


• Mobile home or manufactured homes

However, properties like townhomes, condominiums, mobile homes and modular homes often qualify only if they meet the criteria set by the FHA. For mobile homes, one has to own the land in addition to satisfying the criteria set by FHA.

The best thing about reverse mortgages is that you don't need great income or credit to qualify for such loans. In fact, lenders don't ask for a minimum income or credit requirement when it comes to qualifying for reverse mortgage.

Related readings

• Reverse Mortgages - How seniors tap equity for extra cash