To qualify for a reverse mortgage, the borrower must meet several requirements:
- Age: The borrower must be at least 62 years old.
- Property type: The home must be the borrower’s primary residence, and it must be a single-family home, a two-to-four unit property, a townhouse, a condo, or a manufactured home that meets FHA requirements.
- Equity: The borrower must have enough equity in their home to qualify for a reverse mortgage. The amount of equity required varies depending on the borrower’s age, the value of the home, and the current interest rates.
- Financial Assessment: Borrowers are subject to a financial assessment to ensure they have the ability to pay property taxes, insurance, and other fees.
- Counselling: Borrowers are required to undergo counselling from a HUD-approved counsellor to ensure they understand the terms and obligations of the reverse mortgage. (US only)
It’s important to note that while reverse mortgages can provide a source of income, they also come with costs and risks. Borrowers should carefully consider their options and consult with a financial professional before deciding to pursue a reverse mortgage.