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Reverse Mortgage Requirements |
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Since the reverse mortgages for seniors are all the rage these days, let's take a look at what is required to qualify for and to obtain reverse mortgages. In the United States, a person must be at least 62 years of age and own their own home to qualify for reverse mortgages. Even a pending bankruptcy may not slam the door on reverse mortgages, however, it will probably slow the process down somewhat. The amount of equity you have in your home is the critical factor for reverse mortgages as it is that equity that will be 'funding' the payments into the future and you can be assured that the lender will get necessary appraisals and surveys, etc. to be certain of the real value of your home. The amount of a reverse mortgage loan is determined by several factors including the Federal Home Administration (FHA) or Fannie Mae (FNMA) appraised value of the home, its location, and also the age of the borrower. Fannie Mae has a limit of $200,000 for reverse mortgages closed under its program, but there are proprietary loan products from commercial lenders which can carry higher limits for this sum. To ensure that you enter into reverse mortgages with your eyes fully open and to ensure that you are not taken advantage of or scammed, there is a Federal requirement that you must obtain financial counseling from a source that is approved by the Department of Housing and Urban Development (HUD). A senior citizen should carefully evaluate the requirements of reverse mortgages and consider other, more conventional options, such a home equity line of credit or a second mortgage before moving forward to obtain a reverse mortgage. In any event the financial counseling required for reverse mortgages will serve to help you with these decisions. |
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