Equity Requirements for a Reverse Mortgage
If you are looking for a way to stay in your home and boost your retirement income, it may be worth looking into getting a reverse mortgage. Generally speaking, you aren’t required to make mortgage payments to a lender for however long you remain in your home. Let’s take a look at how much equity you could need in your home to obtain approval for this type of loan product.
Home Equity Requirements May Vary by Lender
Home equity requirements are typically sent by the companies that offer the loan products to homeowners. However, as a general rule, you should expect to need at least 50% equity in your home to get approved for a reverse mortgage. This means that you have paid off at least half of the existing mortgage on the home. For instance, if the home was worth $100,000, the balance on that loan couldn’t be more than $50,000.
Are There Existing Liens on the Home?
A lender will likely require that you don’t have any liens attached to the property. Liens could be put on the home by a contractor who wasn’t paid on time or by local tax authorities because you have an outstanding property tax debt. Furthermore, it may be more difficult to get a reverse mortgage if you are planning to use the money to pay back taxes or to improve the home itself.
Speak With Multiple Lenders About Your Options
There may be multiple ways to cash out the equity in your home without necessarily having to sell it. Ideally, you will spend time talking to multiple lenders about reverse mortgages in Las Vegas and whether they truly meet your needs.