Reverse Mortgage. Is It Right For You?

Reverse Mortgage. Is It Right For You?

What is a Reverse Mortgage?

A reverse mortgage is a form of equity release (or lifetime mortgage). It is a loan available to home owners or home buyers, enabling them to access a portion of the home's equity. The home owners can draw the mortgage principal in a lump sum, by receiving monthly payments over a specified term or over their (joint) lifetimes, as a revolving line of credit.  

Reverse mortgages are available to all US citizens and Permanent Residents age 62 or older with substantial equity in their home. The maximum loan amount you may qualify for is based on the youngest homeowner’s age, current rates, and home value. There is no income or credit score requirements as there are no monthly repayments. You must continue living in your home as your primary residence and continue to pay your properties taxes and insurance.

Is a Reverse Mortgage Right for You?

Without knowing an Individual's particular situation, it's hard to say if reverse mortgage is right them. The best thing a homebuyer can do is get advice from an experienced mortgage professional to determine if a reverse mortgage is right for them. But, here are some basic requirements that you need to know: 

•The youngest borrower must be at least 62 years of age

•LTV must be in the vicinity of 62% - a bit higher for older borrowers (maybe 70% age 75, maybe 75% age 85)

•Credit score does not matter

•Income does not matter

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How To Get A Certificate Of Eligibility For A VA Loan

VA Loan Certificate of Eligibility – What Is It And How Do You Get It?
A VA loan is an incredible benefit offered to men and women of the armed forces who meet certain eligibility criteria. Not only are the benefits exclusive to veterans, they provide opportunities that you can’t get with other loans, like the ability to refinance your home up to 100% of its worth, no down payments on a home purchase, and much more.

To take advantage of the benefits offered by a VA loan, you have to prove you are eligible. In order to do that, you must meet certain guidelines.


To qualify for a VA loan, you must have one of the following requirements:

• Served 2 years during peacetime (Active Duty)   – Could be less if prior to 1974
• Served 180 days during war time (Active Duty) – WWII and Korean War vets need only 90 days
• Served 6 years in the Reserves or National Guard
• Surviving spouse of a service member who was killed in the line of duty

But in addition to meeting one of the above criteria, you must request a Certificate of Eligibility (COE) from the Veterans Association.

This form will ask you for information about your current living situation and your dates of military service. It is recommended that you provide your proof of service form along with the COE. This is the DD Form 214 (that you can obtain online if you do not have a copy).

COE REQUEST:            Certificate of Eligibility

DD214 REQUEST:        DD Form 214

If they were in the normal military you will need their DD214

If they are still active in the military you need a Select Service Letter from their Commanding Officer with their Full Name, SSN, Enlistment State Date, Enlistment End Date, and any Loss Time if applicable on military letterhead

If they were in the Reserves you will need their DD256 and Point Statement

If they were in the National Guard you will need their NGB-22

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