Reverse Mortgage Eligibility
Gone are the days of qualifying for a reverse mortgage simply because one had equity in one's home. Gone also are soft income and credit guidelines, the days of delivering 100% of proceeds at closing, loans funded without mandated / proper education. Reverse loans aren't as easy as they once were but they are much safer and still a great way to access dormant home equity. Is it hard to qualify for a reverse mortgage? Well, yes and no. FHA, VA and Fannie Mae /Freddie Mac loans (forward loans) have always required borrowers to have a stable source of income and to meet 'debt ratio' guidelines; and now reverse mortgages require income qualification too. Reverse borrower income is based on a ‘residual income’ system designed to make sure that borrowers can meet basic obligations .. This is technically called ‘financial assessment’ and is one of the new (HUD letter ML-2013-27) protections enacted by FHA to make certain that borrowers can cover ongoing expenses...