Can I get a reverse mortgage at age 58?

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asked Jul 23, 2023 in Real Estate - Renting by KetProlus (700 points)
Can I get a reverse mortgage at age 58?

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answered Jul 23, 2023 by Wendell (42,480 points)
You cannot get a reverse mortgage at age 58 as you must be at least 62 years of age to qualify for a reverse mortgage which is also known as a home equity conversion mortgage.

However you can sometimes find banks or reverse mortgage lenders that are not affiliated with the HECM program which will sometimes allow you to get a reverse mortgage if you're under 62.

You can lose your house or home with a reverse mortgage by not maintaining the home, keeping on repairs or if you fail to keep insurance on the home.

In a reverse mortgage the homeowner that has the reverse mortgage owns the home.

With a reverse mortgage the title remains with the homeowner and the bank does not own the home unless you default on the reverse mortgage or they foreclose on the reverse mortgage home due to not keeping up with repairs on the home.

Heirs of a reverse mortgage are not responsible for the reverse mortgage debt unless the heirs want to inherit and keep the home.

If you don't want to keep or sell the home that has a reverse mortgage then you don't have to pay back the reverse mortgage and the bank will take the home themselves and then sell the home to recoup the money owed.

When the holder of a reverse mortgage dies then the bank will take the house back and then sell it to recoup the money that was paid out on the reverse mortgage.

However if the reverse mortgage holder has kids or any heirs then they can take over the house and keep the house by paying the full balance of the reverse mortgage loan to keep the home.

In order to sell the home with a reverse mortgage the heirs will need to repay the reverse mortgage loan in full or at least 95 percent if the homes appraised value if the reverse mortgage loan balance owed is more than the homes value.

 If a loved one decides to take out a reverse mortgage on the home, and then chooses you as the heir to that home, then you would inherit the home with the reverse mortgage on it.

You don't have to be completely mortgage free to get a reverse mortgage but you must have a low balance on your mortgage or you must own your home outright.

If you still have a high mortgage balance on your home then you cannot get a reverse mortgage.

A reverse mortgage is a mortgage loan, usually secured by a residential property, that enables the borrower to access the unencumbered value of the property.

The loans are typically promoted to older homeowners and typically do not require monthly mortgage payments.

Reverse mortgages can be a bad idea because they have higher fees than some other loans, you have to maintain your home or lose the home, your house cannot be transferred to a child upon your death if you have a reverse mortgage as the bank will take the home for repayment upon the last borrowers death.

Basically with a reverse mortgage you're selling the home back to the bank through payments and they can get your home for way less than you paid for it.

For example if you took out a reverse mortgage and only got $40,000.00 from the loan and your home was worth $100,000.00 or more then you would be giving the bank a huge profit because upon your death they would get the rest of the money once they sell the house.

A reverse mortgage is a mortgage loan, usually secured by a residential property, which enables the borrower to access the unencumbered value of the property.

The loans are typically promoted to older homeowners and typically do not require monthly mortgage payments.

Reverse mortgage loans allow homeowners to convert their home equity into cash income with no monthly mortgage payments.

Reverse mortgages can be a great financial decision for some seniors but a poor financial decision for others.

Reverse mortgages have costs that include lender fees (origination fees are capped at $6,000.00 and depend on the amount of your loan), FHA insurance charges and closing costs.

These costs can be added to the loan balance; however, that means the borrower would have more debt and less equity.

The high costs of reverse mortgages are not worth it for most people.

You're better off selling your home and moving to a cheaper place, keeping whatever equity you have in your pocket rather than owing it to a reverse mortgage lender.

Reverse mortgage loans typically must be repaid either when you move out of the home or when you die.

However, the loan may need to be paid back sooner if the home is no longer your principal residence, you fail to pay your property taxes or homeowners insurance, or do not keep the home in good repair.

When you take out a reverse mortgage loan, the title to your home remains with you.

Most reverse mortgages are Home Equity Conversion Mortgages (HECMs).

So, the normal term of a reverse mortgage is the length of time a borrower remains living in his home after having taken out the mortgage.

According to Forbes Magazine, the average term ends up being about seven years.

You are not required to make monthly payments on the reverse mortgage because the loan balance doesn't come due until the final borrower moves out of the home, passes away, fails to pay taxes or insurance, or neglects to maintain the home.

A reverse mortgage does not affect regular Social Security payments or disability benefits.

However, if you are on Supplemental Security Income (SSI), any reverse mortgage proceeds that you receive must be used immediately.

Funds that you retain count as an asset and could impact eligibility.

There are no prepayment penalties on reverse mortgages.

In most cases, there's a contract of up to ten years that allows you and other homeowners to pay off the loan balance at any time without penalty.

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