Reverse Mortgage Eligibility: See if You Qualify
Are you interested in reverse mortgage but unsure if you meet eligibility requirements? This unique federally backed lending option allows homeowners to borrow against their equity in their homes, while continuing to live in them, mortgage-free. This type of loan is only available to certain would-be borrowers who meet certain requirements and would most benefit from it. The Corban Financial Group has long-served clients in Redondo Beach, Torrance, Hermosa Beach, Rancho Palos Verdes, Palos Verdes Peninsula, San Pedro, and surrounding communities. We can help you understand the benefits of reverse mortgage and determine your eligibility. Contact us to schedule a consultation today and secure your financial dreams.
Reverse Mortgage Basics
A reverse mortgage is so called because instead of paying into the equity in a home, borrowers receive cash in exchange for a portion of the equity they have already built in their homes. The most common form of reverse mortgage is called home equity conversion mortgage (HECM). HECM is regulated by and insured through the federal government. They were designed by the Federal Housing Administration (FHA), a division of the U.S. Department of Housing and Urban Development (HUD). They were created to allow seniors who have built up significant equity – and savings – in their homes borrow against that equity while continuing to live in their homes. Many seniors supplement their income using a regular or lump-sum cash payout, while others use their loans in the form of a line of credit.
While some seniors choose to continue to live in their existing homes, others use the equity in their existing homes toward a loan to purchase a new home. This is known as HECM for purchase, or reverse mortgage for purchase. If you would like to enjoy the benefits of reverse mortgage but are willing and eager to move into a new home, you may want to consider this option.
Reverse Mortgage Eligibility
While they are funded entirely through private lenders like Corban Financial Group, reverse mortgage rules and eligibility are regulated through the government. The FHA has set forth some requirements for clients to be eligible for reverse mortgage. These include:
- A borrower (or the youngest of two borrowers in a couple) must be at least 62 years old.
- Borrowers must own their homes outright or have a very low balance remaining that can be paid off at the closing of the loan.
- Borrowers must be able to continue to pay for living and homeowners’ expenses, including homeowner’s insurance, property taxes and more.
- Borrowers must undergo an educational session and be approved by an FHA-approved counselor
- Borrowers must agree to live in their homes as their primary residences for the entire term of the loan.
Only certain homes are available for HECM loans. They include single family or 2-4-unit properties and certain approved condominiums and manufactured homes.
Get Answers on Eligibility Fast
The team at Corban Financial Group loves helping our clients find the best-suited loan options for them. We serve clients in Redondo Beach, Torrance, Hermosa Beach, Rancho Palos Verdes, Palos Verdes Peninsula, San Pedro, and surrounding California. We will listen to your unique financial situation and help you understand the specifics of reverse mortgage eligibility. Contact Corban Financial Group to get started today.