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What Criteria Disqualifies you for a Reverse Home Mortgage?



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By : John Cutts    99 or more times read
Certain criteria can disqualify you for a reverse home mortgage, so if you decide a reverse mortgage is for you, you'll want to make sure you meet all the requirements. First and foremost, you must be a senior citizen to qualify to receive a reverse mortgage. Legally, this means you must be at least 62 years old. Since a reverse mortgage works by releasing the equity built up in your home to you as available cash, you'll generally need to have a great deal of equity built up in your home in order for it to make good financial sense. For most people, this doesn't happen until later in life, so this particular qualification can actually benefit you by ensuring that you have built up significant equity.

While you don't need to provide proof of a certain level of income to qualify for a reverse mortgage plan, you do need to use the property up for a reverse mortgage as your primary residence. Another requirement of reverse mortgages is that you keep your property in good condition. Since the reverse mortgage payout is based on the value of the house, it falls on the homeowner to keep up the property's condition, and thus, its value. You are also required to keep home insurance on the property in order to insure its current value, should any damages occur to it.

A reverse mortgage, like a traditional home mortgage plan, charges fees and interest. When you apply for a reverse loan on your mortgage, you'll probably be required to pay certain fees and costs to institute the mortgage. Since many people choose to have their reverse mortgage paid out to them on a monthly basis, there can also be fees involved in this process.

A reverse mortgage can be a great choice for seniors looking for extra income, but you have to be sure it works for you. The loan is paid back when you move out of your house and the bank takes control of the property. So be sure you can make other living arrangements and plan your finances accordingly.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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