Are you or a loved one over the age of 62 considering taking out a reverse mortgage? If so, this beginner’s guide to reverse mortgages is for you. Below, our mortgage loan officers offer insight into the reverse mortgage process, the eligibility requirements, and how to apply to help you understand how these loans may help some older homeowners and what considerations should be taken into account before applying for one.
What is a Reverse Mortgage, and How Does it Work?
A reverse mortgage is a loan for homeowners 62 and older that allows them to access a portion of their home’s equity without having to make monthly mortgage payments. Unlike a traditional mortgage, with a reverse mortgage, the homeowner does not have to make monthly mortgage payments until the homeowner passes away, ceases to use the home as the homeowner’s primary residence, or defaults on the loan (including failing to make taxes or insurance payments).
The homeowner may receive a lump sum payment from the lender when they take out a reverse mortgage, which can be used for any purpose, such as supplementing retirement income, paying off other debts, or paying for healthcare expenses.
As a result, a reverse mortgage may be a great choice for retirees or those planning their retirement, as the loan offers them the opportunity to stay in the comfort of their home (unless they default on the loan, in which case they may face foreclosure) while also reducing their monthly mortgage payments and increasing their cash income.
Reverse Mortgage Application Requirements
There are a variety of personal, property, and financial criteria one must meet to be eligible to receive a reverse mortgage:
Personal Requirements
Those that apply for reverse mortgages must:
Be 62 years old or older
You own a home on your own or have at least 50% equity in the home
The home you own is your primary residence, and you will live in it for the duration of your reverse mortgage
Meet with a reverse mortgage loan counselor before applying
Property Requirements
Reverse mortgage-eligible properties include:
Single-family homes
Townhouses
2 to 4 unit properties with one unit that is occupied by you
FHA-approved condominiums
Financial Requirements
You must prove your financial ability and willingness to meet the reverse mortgage loan obligations, including paying your insurance and property taxes, as well as continuing with upkeep and periodic home maintenance and repairs.
How Can I Apply For a Reverse Mortgage?
Applicants can apply for a reverse mortgage by submitting an application to a mortgage lending company, like Hartford Funding LTD (NMLS ID # 58160). A mortgage loan officer can discuss all your mortgage options, the eligibility requirements, the application process, and any other questions you may have. After applying, your mortgage loan officer will assist you with the next steps once your application is approved or denied.
To learn more about reverse mortgages and to see if you qualify, contact the mortgage loan officers at Hartford Funding LTD.
If you’re looking to apply for a reverse mortgage on Long Island, consider turning to Hartford Funding LTD. We will patiently work with you to offer all the information needed to determine if a reverse mortgage is right for you and then guide you carefully through every step of the application process.
To learn more about our services and schedule an appointment with our mortgage loan officers, call us at (516) 595-7646 or visit our website.
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