Have you heard about the benefits of a reverse mortgage but aren’t sure if you qualify? A reverse mortgage allows you to access money you’ve already invested in your home, something many senior citizens find incredibly helpful. By accessing the money you’ve already invested, you may be able to stay in your home longer, handle unexpected medical bills, travel, and make home improvements, among many other possibilities.

Reverse Mortgage Qualifications

1.  Age Requirement

You must be at least 62 years old to qualify for a reverse mortgage. If you are married, and only one of you is 62 or older then only the borrower 62 or older can take out the reverse mortgage in his or her name. That person will be the only one listed on the title of the property. When the other person living in the home turns 62, you can add the younger person onto the title and loan.

2.  Home Condition Requirement

Your home must pass an appraisal and meet the FHA minimum property standards to qualify for the loan. This is because your home is being used as collateral for the loan, and the repayment of the loan depends on the future resale of your home. For an idea of what these standards look like, check out this practical list based off the official FHA minimum property standards.

3.  Home Usage Requirement

You will have to declare your home as your primary residence. This often concerns snowbirds because they want to live in one home for part of the year and in another home for the other part of the year. Reverse mortgage qualifications require you to live in the home used for the reverse mortgage collateral for “most of the year”. Practically, the guidelines allow you to move back and forth between two residences as long as you do not live out of the home for more than 364 consecutive days.

4.  Loan Condition Requirement

In order to qualify you must have already paid off your mortgage completely or have enough cash on hand to pay the remaining balance on the mortgage before a reverse mortgage can be issued. If you are close to paying your mortgage off but need a little more, you may wish to investigate personal loan options or talk to your lender about options for borrowing cash to pay off the first mortgage and then using money taken out through the reverse mortgage to immediately pay off the expenses. Keep in mind you will also need to pay the upfront closing costs, which can be pricey.

5.  Reverse Mortgage Counseling Course Requirement

The government requires you to take an FHA-approved reverse mortgage counseling course before you apply for a reverse mortgage. This is for your protection, as the course will explain all the benefits and pitfalls of reverse mortgages, ensuring you know exactly what you are signing up for. If you’re interested in reverse mortgages then sign up for a government-approved course near you.

6.  Credit Requirement

There are no credit or income requirements. This is why reverse mortgages are so much easier to get approved than other loan options.

Terms and Conditions After You’ve Taken Out the Reverse Mortgage

You’ll have to keep up the home (again, meeting FHA minimum property standards), pay your property taxes on time, and live in your home as your primary residence for the life of the loan. Once you break one of these requirements, your loan will be terminated, triggering the repayment process. Be sure to have a plan in place just in case you need to move from the home at some point in the future.

Reverse Mortgage Qualifications Summary

If you believe you qualify for a reverse mortgage, you’ll want to sign up for a credit counseling course or session. When you’ve completed the course, you’ll want to investigate reverse mortgage payment options to determine which type of payment plan would best suit your particular situation. Many seniors find a reverse mortgage enhances the quality of their golden years; you may find this to be the case for you also.