Reverse mortgages involve the monthly or lump sum payment of loan proceeds that are made directly to the homeowner. As a result of these payments, the normal income requirements do not apply. There is one major qualification for a reverse mortgage, though. This is the borrower’s age. The youngest borrower must be no younger than 62 years old. This is due to the nature of the reverse mortgage and its purpose, which allow seniors to draw on the equity that the home has accumulated over the years he or she has owned it, while staying in the home for the remainder of his or her life. Most reverse mortgages make tenure payments, which are the monthly payments made for the life of the borrower. Because these payments are made monthly to the borrower, the age limits were imposed so that a 30 year old cannot borrow on a reverse mortgage.

The borrower must own the home outright, or, if a mortgage is owed on the home, the borrower must have made enough payments to pay down the principle so that by the time the reverse mortgage origination happens, the entire original mortgage would be paid off. The borrower must also live in the home for the life of the reverse mortgage. While the homeowner may leave the home for up to 364 consecutive days, if he or she leaves the home for more than a year, the reverse mortgage is defaulted and he entire loan amount is due. The other difference is that unlike a normal mortgage, you cannot be in foreclosure or forced to vacate due to missed payments. Reverse mortgages have other requirements as well, so be sure to meet them all before attempting to borrow on the home. This information was sponsored by the Trade Miner software and is hoping you get a better understanding of the financial markets.

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