Texas Reverse Mortgage Questions Answered

There are myriad loans available to homeowners in need. One of the lesser-known products is the Texas Reverse Mortgage. Not every mortgage consultant knows the ins and outs of Reverse Mortgages, so it is a good idea to work with someone who specializes in Reverse Mortgage products.

A reverse mortgage is a very low interest loan available to elderly homeowners, many of whom would not qualify for a traditional loan due to income or credit requirements. If you familiarize yourself with the bare bones of the product, it will make your borrowing process smoother and more enjoyable.

Here are some of the most commonly asked questions regarding reverse mortgages:

Are there any age requirements for a reverse mortgage?

According to the FHA, the youngest borrower must be at least 62 years of age. There is no such thing as being too old to apply for the loan.

I still owe money on my house; am I still eligible?

Your house does not have to be free and clear, but you cannot have a loan balance that is more than 65 percent of the value of your house.

I don’t have the best credit score — is there a minimum credit score?

There is no minimum credit score; in fact, your credit will not be checked.

Can a reverse mortgage be outlived?

As long as one homeowner lives in the home, the reverse mortgage does not have to be repaid. Keep in mind — you still have to keep up with your taxes and insurance.

What happens when the final homeowner passes away and more money is owed than the home is worth?

When the last homeowner dies, the home can be passed to heirs or it can be sold and any excess equity will be left to the estate. In the event that the house is sold for less than is owed, the lender cannot take other properties or goods from the estate to make up the difference. In this event, the lender must absorb the loss.

Is there a limit on the amount that can be borrowed?

The amount one can borrow depends on the borrower’s age, current interest rate, and value of the home.

How is the money distributed?

The money can be distributed in the following ways. You can get a lump sum at closing, monthly payments as long as the home is occupied by the borrower, equal monthly payments for a fixed period, or a line of credit that allows any amount to be taken out until it is exhausted.

When considering a Reverse Mortgage in Texas, be sure to find a lender with consultants who specialize in reverse mortgages product.