Everything You Must Know About Reverse Mortgage Qualifications

December 21, 2021

Homeowners may express an interest in obtaining a reverse or home equity conversion mortgage (HECM). They do so for a variety of reasons, and quite a few individuals benefit from taking this step. The reverse mortgage allows the owner to access their home equity to meet other financial goals.

Before selecting this option, it is important to carefully consider reverse mortgages pros and cons. Payments remain flexible when this option is selected, so the homeowner obtains more control over their financial situation. The loan remains secured by the home, much as it is with a regular mortgage, and the homeowner must meet certain obligations as established in the loan documentation.

Payments remain flexible when this option is selected, so the homeowner obtains more control over their financial situation. The loan remains secured by the home, much as it is with a regular mortgage, and the homeowner must meet certain obligations as established in the loan documentation.

How does a person know if they meet the reverse mortgage qualifications? Are they eligible, or will they need to look at other funding sources? What happens if they have bad credit? The following guide answers these questions and more.

Personal Requirements

Every person listed on the title of the home must be a minimum of 62 years of age. As a person gets older, they become eligible for more funds from the reverse mortgage. Keep this in mind when determining if now is a good time to borrow and be sure to run your qualifications by using a free reverse mortgage calculator such as the one at ReverseMortgageReviews.org.

The homeowners must remain in the home as long as the reverse mortgage is in place. As a result, a person cannot get a HECM on their rental property or vacation home.

The residence must be completely paid for or the homeowner must have a minimum of 50 percent equity to qualify for a reverse mortgage. Individuals who still owe on their existing mortgage find they can qualify for a HECM if they meet this requirement. The funds from the reverse mortgage are used to pay the existing mortgage and satisfy any existing liens. Any remaining funds can then be used for other purposes. This helps to improve the homeowner's monthly cash flow.

Before obtaining a reverse mortgage, the homeowners must sit down with a reverse mortgage counselor approved by the Department of Housing and Urban Development. This ensures the parties understand what a HECM is, how it works, and the costs associated with the loan. Homeowners feel more comfortable after taking this step, as they better understand the process, the loan terms, and what their responsibilities are under the reverse mortgage. In addition, homeowners cannot owe any federal tax debt if they wish to secure a reverse mortgage.

Property Requirements

Furthermore, before obtaining a HECM, the owners must ensure their property qualifies under the program. A single-family home or a two- to four-unit property occupied by the owners and others is eligible under the program. For a manufactured home built after June 1976 to qualify, it must meet requirements established by the Department of Housing and Urban Development. FHA-approved condominium owners find their property allows them to obtain a reverse mortgage, and owners of townhomes may take advantage of this program.

Financial Considerations

Homeowners must demonstrate they are willing and able to meet the loan obligations. This includes ensuring property taxes are paid, the home remains insured, and they are able to maintain the property and make necessary repairs. A failure to do so could result in the loan being called.

Countless men and women benefit from a reverse mortgage. The funds may be used to pay medical bills or allow the individuals to continue living on their own. Proceeds from the loan tend to be tax-free, and the person can choose the desired disbursement option. As a HECM doesn't affect social security or medicare, every person should consider benefiting from this financial product. Learn more today to see if it is right for you.


Carlos Diaz
I believe in making the impossible possible because there’s no fun in giving up. Travel, design, fashion and current trends in the field of industrial construction are topics that I enjoy writing about.

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