- You must be at least 62 years old, even if you are disabled or retired. However, you won’t qualify for this type of loan if you are younger.
- You must be residing in the property. It cannot be your second home or vacation home.
- Your house must be paid off. Or it could have a low mortgage balance.
- You should be able to cover future housing costs.
- You shouldn’t have delinquent federal debt.
- You must be able to satisfy property requirements.
- You must consult with a counsellor who’s been approved by the HUD.
In case you are married, you and your spouse must be both listed as coborrowers on the reverse mortgage loan so that in case one of you dies or has relocated for medical or health reasons, the other could go on living in the house and still get month from the reverse mortgage loan. However, this is not applicable if one spouse is less than 62 years old.
Back in 2014, the government launched some protections for all nonborrowing spouses. The spouse who is not listed on the loan documents could go on living in the house once the borrowing spouse passes away as long as:
- They were married prior to taking out the reverse mortgage.
- The nonborrowing spouse has been named in the documents for the reverse mortgage loan.
- The surviving spouse must live in the house as his or her primary residence.
- The borrowing spouse must also certify the marriage to their nonborrowing spouse during the loan closing and every following year.
In case the nonborrowing spouse is at least 62 years old after the death of the borrowing spouse, he or she must refinance the reverse mortgage loan if he or she wants to continue living in the house.
How Much Can You Borrow?
If you want to take out a Myrtle Beach reverse mortgage loan, the lender allow you to borrow a percentage of the home equity. A reverse mortgage lender will allow you to borrow as much as 60% of the home equity, however, the actual amount you can take out will be based on several factors.
Age – if you are older, it is possible for you to borrow more. Because you can stay in your house for the rest of your life without having to pay off your reverse mortgage loan, the reverse mortgage lender will use your life expectancy to estimate the duration required until it is repaid. As you become older, the reverse mortgage lender allows you to borrow a greater percentage since it predicts that it would be paid back a lot faster.
Appraised home value – you will be able to borrow more if your home is more valuable.
Current interest rates – a reverse mortgage is a loan and that is a fact. The lender will charge interest on the amount that you take out. You will receive less cash if the market interest rates are high because a much higher percentage will go toward the interest.
Reverse Mortgage Type – Proprietary reverse mortgages and let you borrow a much greater percentage compared to HECM reverse mortgages.
Your Current Financial Situation – Your income and credit score don’t determine the amount you can borrow. But reverse mortgage lenders will perform a financial analysis to ensure that you could still over your homeowners insurance, property taxes, as well as other housing costs after receiving the loan.
When Will You Receive Payment For The Reverse Mortgage Loan?
If you become eligible for a reverse mortgage loan, you could choose to get your money through the following ways:
- Single disbursement – you get the whole value of the reverse mortgage loan at once.
- Tenure monthly payments that you will continue to receive as long as you are alive and remain living in the house.
- Term – these is a method wherein you will be given monthly payments over a certain period of time.
- Line of credit – it is a line of credit that you will have access to whenever you need it.
- Combination – this is a mix of line credit, together with either term payments or tenure.
- For purchase – you will get a lump sum payout so you can buy a new property to sell your home.
Call Reverse Mortgage Specialist if you would like to know more about this type of loan.
Reverse Mortgage Specialist
1293 Professional Drive, Suite 204
Myrtle Beach, SC 29577