Are you ready to take the next step toward applying for a reverse mortgage? Congratulations!
Reverse mortgages let Americans 62-and-up convert part of their home equity (wealth) into cash, a monthly check, or a line of credit. This can provide a financial nest egg for retirees to help meet unexpected costs, such as medical bills and home repairs.
If you’ve taken time researching reverse mortgages and discussed your interest with your family, you’re welcome to contact me to hear more about options.
It’s important to start gathering the documentation required for the application process as soon as you can. Here’s what you’ll need:
- Valid identification
As you’re required to be 62 or older to be eligible for a reverse mortgage, you’ll need to have valid identification showing your age. In most cases, a driver’s license is sufficient. You must also provide a copy of your social security or medicare card to verify your social security number.
- Verification of your principal address
Reverse mortgages are available on your principal home, where you live in for the majority of the year and have at least 50% equity. Vacation homes are not eligible. Usually, your driver’s license address is the same as your principal address. If you don’t have a driver’s license or it doesn’t reflect your principal address, your lender may ask you for other documentation such as bank statements or tax records.
- Verification of income
Your reverse mortgage lender will want to ensure you have sufficient income to continue to maintain your home and pay for property taxes, as well as homeowners insurance. If you’re retired, your income could come from various sources such as social security, pensions, distributions or even a part-time job. You can verify income through items such as a social security award letter, W2s, or statements from your bank.
- Counseling certificate
Before you can obtain a reverse mortgage, you’re required to take part in a counseling session with a mortgage counselor approved by the U.S. Department of Housing and Urban Development (HUD). The session is to help ensure you understand reverse mortgage requirements, as well as alternatives to reverse mortgages. Your reverse mortgage lender will provide you with a list of independent agencies that offer counseling, but the lender cannot make any recommendations on which agency to contact. You can also find a list of counseling agencies on the HUD website. After completing the counseling, you’ll receive a certificate and provide a copy to your lender.
If you’re considering applying for a reverse mortgage, start preparing early
The reverse mortgage application process is less complicated than traditional mortgages. However, we strongly encourage you to take time to research reverse mortgages before applying, and speak to your family about your intentions. Your application process will also be quicker and smoother if you already have your required documentation, so begin preparing now if you’re considering applying.