Reverse Mortgages are a specialized loan available to homeowners 62 and over. This creative resource is used by a wide demographic – from those looking to supplement a fixed income, to the more affluent in need of protection for retirement assets, and even those wanting to purchase a home in retirement. But there are some requirements when it comes to the actual home…
Which types of homes are included?
According the HUD’s Federal Housing Administration, in Connecticut the home must be a single family home, or a 2-4 unit home with one unit occupied by the borrower. Some condominiums and manufactured homes that are approved by HUD also meet FHA requirements.
In the case of a Reverse Mortgage for Purchase, borrowers can use a reverse mortgage to purchase a single family home, or 2-4 unit home with completed construction that has received a certificate of occupancy.
Are there reasons my home may not qualify?
A home with very little equity may not qualify, although homes with paid down existing mortgages often times do and the reverse mortgage can eliminate the mortgage payment.
In addition, homes must be maintained with general upkeep and be current on property taxes and other expenses relevant to the home.
A second home or vacation home may not qualify. The borrower must be living (or plan to live) in the home.
The funds from a reverse mortgage can be accessed via a lump sum, line of credit, monthly installments, or to purchase a home. If you have questions let a reputable reverse mortgage advisor guide you in the many scenarios that are possible and the two of you can think creatively about your needs and desires.
Sara Cornwall is a local Reverse Mortgage Advisor serving the entire state of Connecticut. Contact Sara and learn if reverse mortgage is right for you.