Can I Get Reverse Mortgage If My Home Is In a Trust?

Reverse Mortgage if Home in TrustCan I Get a Reverse Mortgage If My Home Is In a Trust? This question comes up quite often when speaking with seniors considering accessing home equity through a reverse mortgage.

Many people in or approaching retirement have worked with a financial adviser or trust attorney for overall estate and retirement planning advice. Often times, during that process they have set up a trust and placed all or most of their assets, including their home, inside the trust.

If you have done this too, and are now wondering if you will be able to get a reverse mortgage if your home is in a trust, the answer is: “In the majority of cases, Yes.”

The most common type of trust used for estate planning is a revocable trust, also referred to as a living trust. Most revocable trusts are acceptable to HUD for FHA insured mortgage loans.

If you decide to move ahead with a loan application, the lender you choose to work with will request a copy of your trust documents. Your trust will be reviewed by an underwriter for the lender to determine if the provisions laid out in your trust are acceptable under the HUD/FHA guidelines.

In some instances, the trust might be an irrevocable trust. If that’s the case, the lender will still have an underwriter review your trust documents, but it is highly likely that you will not be eligible for a FHA insured reverse mortgage. If this situation applies to you, you should not give up after simply reading this article. Instead you should contact a reverse mortgage lender for further advice and a review of your trust documents.

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