How Can I Get a Reverse Mortgage?

how can I get a reverse mortgage

How Can I Get a Reverse Mortgage?

How Can I Get a Reverse Mortgage – is a question we get on a daily basis. The inquiries come from folks that want and need this type of financial help. However, many people do not know what the first…and most important ingredient is in order to qualify for a reverse mortgage.

That “Secret Sauce” ingredient is…HOME EQUITY!

Many people are confused because they hear commercials on radio and television or see ads in their local newspaper encouraging people 62 or older to get a reverse mortgage. Somewhere along the line, the only part of the commercial or ad that sticks in people’s minds is the age 62 or older part. People are not hearing the rest of the message regarding how to qualify for a reverse mortgage.

It’s heartbreaking to have folks call and email saying things like: “I thought this was a government program to help senior citizens.” or “If the government can bail out the banks, why aren’t they helping senior citizens at risk of losing their homes?” “How can I get a Reverse Mortgage and save my home?

Although I completely empathize with those sentiments, the fact of the matter is, qualifying for a reverse mortgage has always required A LOT OF HOME EQUITY….in fact depending on your age, anywhere from 40 to 60% equity is needed to qualify.

Reverse mortgages are deferred interest loans. This means that whatever amount of money you borrower from a reverse mortgage will accumulate interest over the number of years that you are alive and continue to live in your home. If your life expectancy is 20+ years from the time you take out a reverse mortgage, the amount of interest that will build up over 20+ years will be substantial.

The lenders try to estimate what your home will be worth in the future, versus the total amount of principal and interest that will accumulate over your expected lifetime. They try to make an educated guess about how much money they can lend you today, allow for the deferred interest accumulation over your lifetime and hopefully, not be “underwater” by the time the loan has to be paid off through the sale or refinance of your home by your heirs.

These are treacherous times for sure, not only for all of us citizens but for reverse mortgage lenders too. There is tremendous uncertainty about where housing values are going in the future. Are they still declining, will we ever see the values from 2002-2006 again? Maybe…maybe not.

If you’re interested, here is an article naming the 10 U.S. cities that have the highest number of “underwater” homes, (meaning, more is owed on the homes than the homes can be sold for.) As you would expect, almost all of these same cities also have higher unemployment rates than the national unemployment rate of 9.1%.

If you would like to find out if you have enough equity in your home to qualify for a reverse mortgage loan, please request an evaluation today. We are happy to run the numbers for you without any obligation on your part.

Find out today if you still have enough equity left in your home to qualify for a reverse mortgage loan.

Free Reverse Mortgage Quote