How Does a Reverse Mortgage Work

If your retirement years are approaching, you may be starting to plan for financing your post-working years. One option is using reverse mortgages in Las Vegas. These mortgages allow you to use your home’s equity for retirement while continuing to live in your home in the near future. As with any mortgage, you’ll want to figure out if you qualify and if this type of mortgage is right for you. The best loan officer Las Vegas will help you understand a reverse mortgage’s qualifying criteria and the steps required to secure a loan.

Know the Qualifications

To get a reverse mortgage, you’ll need to meet essential qualifying criteria. First, you must be at least 62 years old. Secondly, you (and an eligible spouse, if applicable) must use the home as your primary residence. Next, you can’t have any delinquent federal debts. You must own your home or have high equity in it, and your home must meet all FHA property standards. You must also pay all insurance fees, home maintenance costs, and property taxes during the time you live in your home. To apply for the loan, you must schedule a counseling session with an approved HECM counselor.

Meet With a Lender

Once you’ve determined that you meet the loan’s qualifications, you will need to meet with a lender. The lender performs a financial assessment that includes looking at your payment history, credit, and checking for outstanding mortgage loans. A lender will also verify that you don’t have any federal debts or property liens. The lender will request to see income statements such as Social Security, pension payments, a 401(k), or pay stubs to verify that you can cover all housing costs.

Schedule HECM Counseling

Next, you’ll need to attend a mandatory counseling session with an HECM officer. This ensures that you understand the pros and cons of obtaining a loan from a third-party professional. An HECM counselor is a neutral third-party individual who provides facts about a reverse mortgage. The counselor’s goal is to provide you with the information necessary to make an informed decision that isn’t swayed by opinions. (Read more on the step by step guide for buying a home.)

What Is The Downside To a Reverse Mortgage

Understand Your Limits

When taking out reverse mortgages Las Vegas, you’ll want to know how much you can borrow. The FHA caps a reverse mortgage limit at $765,600. However, several factors influence the amount you can borrow, including the youngest borrower’s age, current interest rates, and your home’s appraised value. You have several options for fund distribution with this type of loan, including tenure and term payments or a line of credit.

To learn more about a reverse mortgage, the best loan officer Las Vegas can help you out. Contact us today to find out if this type of mortgage is right for you, and if you meet the necessary qualifications.