The homeowner has to qualify for a reverse mortgage, in order to qualify you must:
- be at least 62
- there needs to be enough equity in your home to accomplish your goals
Additionally, there are circumstances when a reverse mortgage would not be a good fit for you.
A reverse mortgage increases the debt and any beneficiaries to the estate have to pay it off, so, if the homeowner wants to will a free and clear house to their heirs, this clearly is not the financial tool for you.
The homeowner may have other people living with them, kids, grandchildren, etc., if they’re not covered by the HECM contract, when the homeowner expires, they have to go.
Closing costs with a HECM loan are more than your standard loan, so if your needs are for a short term loan, a reverse mortgage is probably not the best tool for you.