How to Get a Reverse Mortgage
What it is
| At a Glance | |
|---|---|
| Loan Type: | Mortgage |
| Lender: | Bank |
| Secured: | Yes |
A reverse mortgage is a loan against a borrower's home that a borrower does not have to pay back as long as they live at the residence used as collateral. With a reverse mortgage, people can turn the value of their home into cash without moving, renting, or repaying the loan each month. The cash obtained through a reverse mortgage can be obtained all at once through a lump sum of cash, through a regular monthly cash advance, as a credit line account that lets the borrower decide when and how much cash is used, and a combination of any of the above payment methods.
Borrowers of reverse mortgages do not have to pay anything back until they die, sell their homes, or permanently move out of the home used for the reverse mortgage. In order to be eligible for reverse mortgages, a borrower must own a home and be 62 years of age or older.
Who it's for
Reverse mortgages are available for anyone at least 62 years old who owns a home and may be in need of extra cash. Reverse mortgages do not require repayment as long as the borrower continues to live in the home. That means borrowers of reverse mortgages do not need an income to qualify for a reverse mortgage.
What you need to do to apply
In order to obtain a reverse mortgage, interested applicants will need to contact a local lending institution and inquire about the different options and rates available. Personal and financial history, including a credit report, will need to be made available to the lending institution. A property appraisal may also be required.