In order to qualify for a Reverse Mortgage you have to be 62 years of age or older and the property must be your primary residence. The most common is a Home Equity Conversion Mortgage (HECM) and it allows homeowners to use their property as security for a loan but differs from a traditional mortgage in that making monthly mortgage payments is eliminated. Instead you can receive a lump sum, a line of credit or receive a monthly tax free amount. The amount that you “borrow”, comprised of principal and accruing interest, are added to the mortgage balance. You still must qualify by showing you can pay your property taxes, home insurance and all your bills but there is no minimum credit score required. The costs associated with a reverse mortgage can be high and there are guidelines regarding repayment. Repayment is deferred until you sell the home, move out or pass away. If you become delinquent on real estate tax or home insurance payments then the Lender may take legal action to sell the house.
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