Getting approved for a reverse mortgage can be tricky, and several factors could affect your chances of approval. Don’t let this discourage you from pursuing a home loan if it’s the right option!
We want to help you get approved, so we’ve put together a list of things you can do to improve your chances of getting approved.
Check your home’s eligibility.
The first step in getting approved for this home loan is determining if your home qualifies. The appraiser will assess the condition of your home and take photos. No standard repairs or improvements are necessary, but your property must be safe and structurally sound.
The appraiser will also ensure that no safety hazards could prevent someone from living there. If you have a swimming pool with no fence around it, for example, that would be considered a safety issue and would disqualify your home from being eligible.
You must meet the minimum age requirement
The minimum age to qualify is 62. If you’re not yet 62 and think this could be the right solution, apply for a reverse mortgage when you hit that age. Keep in mind that doesn’t mean you can’t do anything now to improve your financial situation. You can start saving money, paying down debt, or otherwise working toward improving your credit score in anticipation of applying when you turn 62.
Stay on top of credit scores
The financial history of applicants plays a prominent role in the loan approval process. Unfortunately, seniors are often less aware of managing their credit scores than younger people are. Seniors must understand how their credit scores can impact their ability to get loans and what they need to do to improve them.
Find the right lender
Borrowers need to find lenders who know the ins and outs of senior home loans to avoid surprises. Borrowers should choose lenders with extensive experience in this type of home loan who have helped many clients just like themselves successfully obtain these loans.
The first step in obtaining a senior home loan is attending an approved counseling session with an independent third party who will walk you through the process and make sure that you understand how it works. The counselor will review your finances with you, help you determine how much of your home’s equity you can access through this senior home loan, and explain how much money you could receive.
Securing a senior home loan is not as daunting as it seems. However, ensure you have a decent credit score and have paid off most of your existing debt, you’ll significantly improve your chances of being approved for one. Not only that, but it’s essential to make sure you meet the age requirements so that you’re eligible by the time an approval comes through. Failing to do these things could result in a significant delay in getting the funds from your home loan.