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Hello, just want to know if there is a maximum loan to value on reverse mortgage? Does the property need to be fully paid in order to qualify? Are the requirements also the same as a regular loan (full docs)?

By Cherry on 01.17.2019

Hi Cheryl,

Reverse mortgages do not have “LTV’s” for which you apply.  You receive a benefit or loan amount that you can take in several ways based on the property value or the HUD lending limit whichever is less, your age and interest rates in effect at the time.  All the information is fed into the reverse mortgage calculator and your benefit is determined by a predetermined calculation. 

The property can have a loan on it at the time or be paid in full, but if there are outstanding loans, they must be paid in full with the reverse mortgage loan and if the loan for which you are eligible is not sufficient to pay the existing loans in full, you must have sufficient funds to be able to pay them off with other funds available to you or the loan cannot be closed.

The loan requirements are somewhat different, but you still must have overall sound credit and enough income to be able to pay your property and debt obligations after the loan closes.  To make this determination, underwriters use a “residual income” method to approve the loan.  Depending on your family size, you must have varying amounts of money left after paying debts and property charges to qualify. 

To determine your benefit (loan amount), you can go onto our website and answer a few questions, nothing personal, and the calculator will tell you how much money you would receive and how you could receive it (lump sum, line of credit, monthly payment, etc.).  If that all works for you and you want to see about income and or credit, we can also help you with that. 

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