Are You Qualified?

Determining whether you are eligible for a reverse mortgage is fairly straight forward. Even though these senior citizen loans are becoming common place and there is a lot of media coverage about them, many people are still a bit hazy about what the basic eligibility requirements are. Unhappily, we get requests on a daily basis from people who want or need this type of loan, but who simply are not eligible for it.


Some people are under the impression that to be eligible all one needs is to own a home, regardless of how much is still owed on the house. They think of a HECM (Home Equity Conversion Mortgage) as a traditional refinance transaction where the loan amount can be very close to the value of the home, for example 75 or 80% LTV. A common question from perspective borrowers is, “What is the maximum loan to value?” However, that question can’t actually be answered with a blanket formula that’s uniform across the board. Each of these loans is individually calculated based upon the age of the youngest borrower, the value of the home, and the current interest rate.


Property Equity

To be eligible, there must be substantial equity in the property. Minimally, the amount of equity should be in the neighborhood of 50 to 60% of the appraised value, depending on the ages of the homeowners and the current interest rate. The reason the equity requirement is so high is because the equity must last the expected life time of the youngest owner on title to the property.

For example if the youngest homeowner has just turned 62 (which is the minimum age requirement) the money being paid out to the seniors from their accumulated equity, could potentially have to last 30+ years.

To Be Eligible

  • At least one owner on title to the home must be at least 62 years old
  • There must be substantial equity in the home – 50 to 60%
  • The home must be your primary residence
  • Eligible property types are: Single Family Homes, Condos, Town-homes, and 2-4 Unit owner occupied residential properties.
  • Currently, agriculturally zoned property is NOT eligible, some rural properties, log houses, manufactured homes and most coops are not eligible at this time.
  • You must complete Reverse Mortgage Counseling

Criteria that are NOT considered when determining if you are eligible are:

  • There are no income or medical qualifications

Use our calculator if you would like to take a quick look at whether you are qualified for a reverse mortgage loan.

After you determine that you have enough equity in your home to qualify, you will want to get a complete benefit summary that will show you the various loan options that you are qualified for and which one will pay you the most money. The summary will be specifically prepared for your property and based on your particular age(s). Get your free reverse mortgage quote today!