Reverse Mortgage Guides - making the pros and cons of reverse mortgages clear.

Reverse Mortgage Eligibility Requirements

In general, to qualify for a reverse mortgage the youngest homeowner must be 62 years old or older and have sufficient home equity (about forty percent).

Reverse mortgage eligibility

Determining whether or not there is sufficient equity in the home is an FHA calculation that takes into account:

  • Current interest rate
  • Whether the rate will be variable or fixed
  • Age of the youngest homeowner
  • Location of the property

You can use the online reverse mortgage calculator to find out if you have sufficient equity and what the loan principal limit would be.

Things that do not affect eligibility for a reverse mortgage:

  • Income
  • Credit history
  • Discharged bankruptcy
  • Health of the homeowners

Frequently asked questions:

  • If a homeowner is not 62 but they are permanent disability, can they qualify?
    • No. The FHA only looks at age to determine reverse mortgage eligibility and makes no exceptions for disability or Social Security status.
  • Can someone qualify if they have a mortgage?
    • Yes. More than half of people who take out a reverse mortgage use it to pay off their existing mortgage so they can stop making monthly payments.
  • Do all 62-year olds who own their home qualify?
    • No. About one third of homeowners who want to get a reverse mortgage are not eligible because they don't have enough equity built up in their home. The younger the homeowner is, the more equity they need to have to qualify.
  • What happens if there isn't enough home equity to qualify?
    • This is called a "shortfall." This means that the reverse mortgage would not provide enough money to pay off the existing mortgage on the home -- it is coming up "short." In this situation, some homeowners chose to make up the difference by paying down the balance on their mortgage by the amount of the shortfall so that they can qualify for the reverse mortgage. However, most people who want a reverse mortgage and have a shortfall don't have enough money to do this.