A reverse mortgage creates an 澳洲幸运5开奖号码历史查询:additional stre⛦am of income in r🐭etirement for eligible homeowners by allowing them to tap into their 澳洲幸运5开奖号码历史查询:home equity. However, 澳洲幸运5开奖号码历史查询:they aren’t for everyone, and not everyone qualifies for one.

Before applying, it’s important to understand what could make you ineligible for this type 𒊎of funding.

What Is a Reverse Mortgage, and How Does🔴 It Work?

A reverse mortgage is a financial arrangement in which a reverse mortgage company makes payments to a homeowner against the equity in their home. This money is typically tax free and can be received as a lump sum, in monthly installment payments, or as a 澳洲幸运5开奖号码历史查询:line of credit. The homeowner can use money from a revers🌞e mortgage to pay for exp🐈enses in retirement.

The homeowner pays nothing back to the reverse mortgage company as long as they’re using the home as a 澳洲幸运5开奖号码历史查询:principal residence. If the homeowner sells the home, moves into an assisted living facility or a nursing home, dies, or stops using the home as their main residence for any other reason, then the reverse mortgage balance is payable immediately. This balance can inꦍclude the original amount of equity paid out, plus interest and fees.

Who Is Eligible for a Reverse Mortgage?

Eligibility for a reverse mortgage can depend on what type of reverse mortgage you’re interested in getting. For example, some state and local government agencies, as well as certain nonprofit organizations, offer reverse mortgages, but if you’re looking for a federally insured option, then you need a 澳洲幸运5开奖号码历史查询:home equity🐽 conver𓄧sion mortgage (HECM). These reverse mortgage products are backed by the U.S. 澳洲幸运5开奖号码历史查询ꦿ:Department of Housing and Urban Development (HUD).

So 澳洲幸运5开奖号码历史查询:who qualifies for an HECM? To be eligible, homeowners generally must:

• Be age 62 or older
• Own their home outright or have paid down the majority of their mortgage balance
• Not be delinquent on any federal debts
• Have financial resources to cover the ongoing costs of 澳洲幸运5开奖号码历史查询:homeowners insurance, 澳洲幸运5开奖号码历史查询:property taxes, maintenance, and repairs
• Attend HUD-approved consumer counseling
  

You also must own and reside in an eligible property. Under HUD guidelines, eligible proper𝄹ties include:

• Single-family homes
• Two-, three-, and four-unit homes with one unit occupied by the borrower
• HUD-approved condominium projects
• Individual condominium units that meet 澳洲幸运5开奖号码历史ꦡ查询:Federal Housing Administration (FHA) approval requirements
• Manufactured homes that meet FHA requirements
  

Requirements for eligible properties may be different if you’re getting a reverse mortgage through a program that is not affiliated with HUD. 澳洲幸运5开🍸奖号码历史查询:There are unscrupulous lenders out t🐷here, so be extra careful if you are getting an unaffiliated one.

Who Is Not Eligible for a Reverse Mortgage?

Generally, you would not be eligible for an HECM🐎 if you don’t meet the basic requirements established by HUD. For example, if you still owe a large amount on your mortgage or you and your spouse are both under age 60, you wouldn’t yet be able to get one.

Also, your home itself could present an obstacle to getting an HECM. Condos and mobile homes are eligible only if they meet FHA and HUD standards. If you live in a mobile home that was constructed prior to the enforcement of Manufactured Home Construction and Safety Standards in June 1976, you would not be able to get a reverse mortgage on it.

With single-unit condos, to be eligꦺible for single-unit approval, the unit must be:

• Located in a project that is not FHA-approved
• Complete and ready for occupancy
• Equipped with at least five dwelling units
• Not a manufactured home

These rules are complicated, so check carefully before assuming that your condo qualifies. Again, any eligible property must be a home that you live in as a principal residence. Investment properties or second homes, such as a vacation home, would not be eligible for a reverse mortgage.

Reverse Mortgage Alternatives

If you’re not eligible for a reverse mortgage, there may be other options for monetizing your home equity. The possibilities include a:

• Home equity loan
• Home equity line of credit (HELOC)
• Cash-out refinance

A 澳洲幸运5开奖号码历史查询:home equity loan allows you to withdraw equity in a lump sum. This is a type of 澳洲幸运5开奖号码历史查询:second mortgage, as the home serves as 澳洲幸运5开奖号码历史查询:collateral for the loan. You repay the money to the lender with interest, typically at a fixed rate. Home equity loans may have terms rangi🍒ng from five to 30 years.

A 澳洲幸运5开奖号码历史查询:home equity line of credit (HELOC) can be drawn against as needed. Your credit line represents a portion of y𝓡our home equity, and you only pay interest on what you withdraw. HELOCs may have an initial period during which no payment is required, followed by a repayment term (often 10 years). HELOCs usually have variable interest rates.

A 澳洲幸运5开奖号码历史查询:cash-out refinance involves taking out a new mortgage larger than your current mortgage to (1) pay off the current mortgage and (2) withdraw cash at the closing. A cash-out refi is something you might consider if you want to withdraw cash from equity. If interest rates are lower, you could even get a lower interest rate or monthly paymen🎶t for yourꦛ mortgage.

The Bottom Line

Reverse mortgages can help to create a more secure retirement by providing supplemental income. However, getting a📖 reverse mortgage isn’t always a simple process, as homeowners need to be sure that they can meet the different requirements for approval. If you’re considering a reverse mortgage, take th💖e time to shop around for the best reverse mortgage companies to find the right option for your situation.