Who Qualifies for a Reverse Mortgage?

A reverse mortgage is a special loan designed for folks typically aged 62 or older (55+ in California) who own their homes outright or have at least half of their home paid off. It's a way for them to get some extra money without having to sell their home or be required to make monthly mortgage payments.
To get a reverse mortgage, you need to meet certain rules from the people lending you the money:
Age: You need to be at least 62 years old (55+ in California) to qualify. This is to make sure you have enough value in your home and are likely retired or getting close to it.
Homeownership: You must own your home outright or have paid off a big chunk of it and it needs to be the home you live in live at least 1 day over 6 months of the year.
Property Type: Most kinds of homes qualify, like single-family houses, condos, and some manufactured homes. But your home needs to be in good shape, and if you're getting a Home Equity Conversion Mortgage (HECM), which is the most common type of reverse mortgage, it needs to meet some extra standards set forth by HUD.
Financial Assessment: Lenders don't look at how much money you make or your credit score, but they do want to confirm you can handle things like property taxes and home insurance. They want to ensure you can keep living in your home without any money troubles.
Reverse Mortgage Counseling: Before you decide on moving forward with a reverse mortgage, you have to chat with a HUD-approved counselor who knows all about them. They'll explain how it works, what it costs, and what could go wrong. It's all to help you decide if a reverse mortgage is the right option for you.
Loan Limits: The amount of money you can get from a reverse mortgage depends on a few things, like how old you are, how much your home is worth, and what the current interest rates are. There are limits on how much money you can get, but currently, you can get as much as $4 million.
Legal Stuff: You’re required to be a legal resident of the United States and submit the proper documentation.
Stable Finances: While income and credit score are looked at differently than a regular mortgage, lenders do want to be sure you can keep up with property taxes, home insurance, and any other property expense obligations. They want to make sure you're financially stable enough to handle a reverse mortgage.
So, if you're thinking about a reverse mortgage, make sure you understand all the rules and talk to someone who knows about them, like me. It could be a good way to get some extra cash, but it's important to make sure it's the right choice for you.