7 Things Reverse Mortgage Lenders

1. The Home Appraisal Value - One of the first things that reverse mortgage lenders will check before you can be approved for this type of loan is the home appraisal value.

This value shows what your home is currently worth, and this must be determined before a loan amount can even be calculated. The more your home is worth the higher the loan amount may be, and the easier it may be for you to qualify for this type of loan.

2. The Amount of Equity in The Home

The amount of equity that you have in your home is another fact that is checked and verified before you can be approved for a reverse mortgage.

Your equity is the amount that you have in the home, and this is essential to any reverse mortgage. If your home is worth $100,000 but your equity is only $25,000 then this will greatly impact the amount you may qualify for.

3. The Condition of The Home

The current condition of the home is a big concern for most reverse mortgage lenders, and something that is normally checked before any reverse mortgage is offered.

The lender plans on recovering the debt owed through the sale or refinancing of the home once it is no longer the primary residence of the borrower, and the home must be in good condition for this to occur. If your home is in poor condition or has not been properly maintained and needs major repairs then you will not usually be approved for this type of loan.

4. The Age of The Lender

The age of the lender is a very relevant factor, and one that is verified before any reverse mortgage loan is offered. To qualify for this type of loan you must be at least 62 years old, and this fact must be confirmed before you will get an approval for your reverse mortgage application.

5. Your Ownership of The Home 

All of the mortgage lenders will check to ensure that you really are the owner of the home you are trying to get a reverse mortgage on.

This is done by checking the deed on record for the property. Whenever any property is bought and sold the transaction must be properly recorded, and part of this information is the owner of the home as well as any lien holders on the deed.

6. Your Residence in The Home

You must reside in the home that you are applying for, and this is a requirement for any reverse mortgage.

Once the home is no longer your primary residence for the specified time period, usually 90 days to 1 year depending on the specific mortgage, then the loan amount may become due. Most reverse mortgages have a clause that allows you to be in a nursing home for 1 year before the home is no longer considered your primary residence.

7. Credit Reports on All Borrowers

Reverse mortgage lenders will usually require credit checks and reports on each of the borrowers, and also on any spouse even if the spouse is not a signatory to the loan.

This type of loan is based more on your home equity and value than your credit score, but your credit rating could affect the interest rate that you will get on the loan.

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