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The passing of the American Homeowner Ownership and Economic Opportunities Act of 2000 Section 201 has now provided senior citizens further financial aid through the form of a reverse mortgage. Of all the different age groups that are eligible to take out some form of financial aid, it is the senior citizen age group that requires the most financial assistance yet have the least amount of options. This is because majority of those within this age group have already retired and only rely on their savings and pension as a source of funds to help them live out their remaining years. Through the introduction of the reverse mortgage, senior citizens have now been given the opportunity to get the financial aid that they need for medical care, home improvement, and the like.
This has been made possible because of the fact that unlike traditional forms of mortgages and loans available in the market, reverse mortgages are exempted from any tax obligations and the responsibility of the payment falls on the financial institution or creditor. Senior citizens who have been granted a reverse mortgage are not required to make any form of repayments to the financial institution or creditor for as long as one or both senior citizens remain to live in the home whose equity has been used.
If you are considering taking out a reverse mortgage, there are a few requirements you would need to present when you go to a creditor or financial institution. Here are the requirements that you would need.
Age Requirement
According to Section 201 of the American Homeowner Ownership and Economic Opportunities Act of 2000, the reverse mortgage is available only for individuals who are at least 62 years and above. You may be able to apply for a reverse mortgage if you are below 62 years of age provided that your spouse has met the minimum age requirement. This is because the conditions stated in the American Homeowner Ownership and Economic Opportunities Act of 2000, once it is proven that at least one spouse is at least 62 years of age and above, both will become eligible to take out a reverse mortgage.
Home Equity
The equity value of your home is its fair market value minus any existing loans that you may have taken out. In order to get the home equity value of your property, you would need to attain the services of an appraiser. For your home equity to also be eligible, you must be in ownership of a permanent type of property such as single house, an apartment or condominium. If you live in a mobile home or a trailer, you would not be able to qualify for a reverse mortgage.
Length of Stay in Home
For you to be eligible for a reverse mortgage, you need to have stayed in your current residence for at least one month. This is the period of time that financial institutions and creditors would consider you to have a permanent residence on the home whose equity would be use towards the reverse mortgage that you are planning to take out.
Home Equity to be Applied Must be Primary Place of Residence
If you have been fortunate enough to be able to purchase a vacation home, you would not be able to use this towards the reverse mortgage that you are planning to take out, even if you meet the one month stay period requirement and the home equity is a lot higher than your primary residence. This is because the reverse mortgage can only utilize the home equity of the house that you have stayed most of your life with, which is your primary place of residence.
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