Reverse Mortgage Loan Blog

Q: A while back you had someone ask you about reverse mortgages. I lost the article; therefore, would you please let me know how to attempt the process of getting a reverse mortgage. I will be 62 on Dec. 26 of this year. Does your credit standing have to be excellent, or will a person with fair credit be acceptable? Also, right now I have a payment agreement with my mortgage company until a year from July.

My balance owing on the property is approximately $32,000. Do you have enough information to give me the details needed to proceed? In addition, just exactly how does a reverse mortgage work? — D.H.

A: You don’t need to prove credit or even income to place a reverse mortgage, because you won’t make any payments as long as you live in the house. You remain the owner of the property, just as with any other mortgage.

When you move out or die, everything you’ve received — plus closing costs and interest — must be paid back, usually by the sale of the house. If you live a long time and borrow more than the house is worth, mortgage insurance takes care of the shortfall.

It’s possible to use the reverse mortgage to pay off your existing loan, and then receive regular monthly checks, building up that debt against your home. The amount you can borrow is based on the value of your home and life expectancy. At only 62, when you could be expected to live and collect payments for a long time, you would be offered less than if you were older. But if your house is worth a lot, perhaps there would be enough to relieve you of your present mortgage for a start.

You can find a great deal of information at reversemortgage.org. There, you can calculate just how much you would be allowed to borrow.

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