In order to qualify for a reverse mortgage, borrowers must meet the following conditions:

• Homeowners must be at least 62 years of age.
• The home must be owned free and clear of any mortgage or have a small mortgage balance that can be paid off with the proceeds of the reverse mortgage.
• The reverse mortgage must be occupied as the primary residence and meet minimum FHA property requirements.
• The homeowners cannot be delinquent on any federal debts.
• Each borrower must attend and receive an education class approved by an independent third-party counselor.

• The loan amount available is based upon several different reverse mortgages calculators and criteria.
• A reverse mortgage loan is based on the age of the youngest borrower.
• Rates are based upon current market conditions.
• Loans are based upon the lesser of the current FHA limits, the appraised value of the home, or the sales price of the MIP (Initial Mortgage Insurance Premium).
• You can choose between a HECM Saver Initial MIP or the HECM standard.

• Reverse mortgage loans are available on single-family homes (SFR) and one to four-unit properties.
• Some manufactured homes approved by FHA are eligible.
• Condominiums and townhomes are eligible for a reverse mortgage loan but require approval.
• PUD (Planned Unit Development) properties are eligible.
• A small portion of newly constructed homes are eligible. Please inquire about details.

Lump Sum Payment - the equity of a reverse mortgage can be taken as a one-time distribution (cash at the time of closing).
Term – a set fixed amount are distributed to the homeowner for a predetermined number of years.
Tenure – a predetermined monthly payment payable to the homeowner for the duration of residency.
Credit Line – homeowners can choose to withdraw funds at any time until the line of credit has been exhausted.
Combination – the homeowners can also choose a combination of the methods listed above.

With the use of several reverse mortgages calculators, the amount available to homeowners is determined by four factors:

• The age of the existing borrowers. 62 is the minimum requirement.
• Appraised value of the existing property.
• Loan limits imposed by the Federal Government.
• The current interest rate based on market conditions.

A reverse mortgage is unique compared to a HE (home equity) loan in many different ways. A home equity loan can also be referred to as a home equity line of credit or a second mortgage. Most home equity loans require strict requirements for credit as well as income. A reverse mortgage will allow eligible homeowners who have created equity in the home over the years to qualify even if there have been credit issues in the past. Reverse mortgages have no credit score requirements. Additionally, reverse mortgages can allow seniors who are not earning income to qualify.

Compared to a traditional mortgage, reverse mortgage loans do not require a monthly payment by the homeowner. Compared to paying the lender each month for the right to live in the home, homeowners can receive monthly payments to supplement expenses. The amount of money a homeowner is eligible for is determined with a reverse mortgages calculator that takes many factors into consideration. Typically, the more equity available in the home, the more a senior can receive.

Homeowners are still required to maintain insurance on the property, as well as staying current on real estate taxes. Continuing maintenance is expected on the home as well.

It is impossible to outlive a reverse mortgage once you qualify. As long as at least one of the homeowners on the note live in the house, and it is considered the primary residence, the loan will remain in place and will not become due. Homeowners must adhere to the requirements set forth by FHA, including the payment of property insurance and real estate taxes. See one of the reverse mortgages calculators to determine eligibility.

At the time of death, or if the home is not considered to be the primary residence of the final remainder on the title of the home, the estate of the homeowner can choose to put the home up for sale, or to repay the reverse mortgage. If the home is worth more than the existing balance owed, the equity that remains belongs to the estate. If the proceeds from the sale of the home are not enough to cover the balance due to the lender, the lender must take a loss and will request reimbursement from the Federal Housing Administration.

The remaining assets will not be considered as collateral against the reverse mortgage home loan. Assets such as second homes, automobiles, stocks, bonds, mutual funds, and other valuables will not be used to pay off the remaining balance of the reverse mortgage.