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Is there a minimum % equity required for a reverse mortgage?

by RandallForrest from Springfield, Illinois. Aug 28th 2009 Reply


Parham Rezaeipour (Parham Rezaeipour)
#4 ranked lender in Indiana - 8 contributions

To be eligible for a reverse mortgage, there must be substantial equity in the property. Minimally, the amount of equity should be in the neighborhood of 50 to 60% of the appraised value, depending on the ages of the homeowners and the current interest rate. The reason the equity requirement is so high is because the equity must last the expected life time of the youngest owner on title to the property.For example if the youngest homeowner has just turned 62 (which is the minimum age requirement to be eligible for reverse mortgages) the money being paid out to the seniors from the built up equity, could potentially have to last 30+ years.

Aug 28th 2009
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Furthermore, reverse mortgage qualifications are much simpler than traditional loans, which require many forms of verification and approval. In contrast, reverse mortgages require only that borrowers be age 62 or above, own at least 30% of the equity on their property, and that the property be the borrower's inhabited primary residence. Finally, since reverse mortgages are "non-recourse" loans, borrowers do not worry about leaving heirs with debt, as they will not be responsible for paying any decrease in equity during the course of the loan. Many seniors are going to find http://www.reversemortgagelendersdirect.com/reverse-mortgage-information/ to know more. Its help me lot.

Apr 17th 2013
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