How to Obtain a Reverse Mortgage

Video Transcript

"Obtaining a reverse mortgage is very similar to a regular mortgage in that there are certain requirements that have to be met. Number one you have to be at least sixty-two years old, it does have to be your primary residence you cannot get a reverse mortgage on a rental property or a second home. Then what happens is with the bank or the funding mortgage company there is a certain loan to value calculation they put in it is based on your age at the time of the application, what the home is actually worth, and then from that they determine how much actual funds are available for the reverse. Now if you have an actual first mortgage on the property regular first mortgage that does have to be paid off by the reverse and then they can calculate after that what the proceeds of the loan will be. Now there is two ways that you can receive money is from the first, you can either get them in a monthly stipend like you pay yourself income every month, or you can have it available in a line of credit that you can tap into as you see fit. So obtaining a first mortgage is very similar to a regular you still do an appraisal you have to have title insurance, the difference is is that you have to be at least sixty-two years old and a reverse mortgage pays you, you do not pay the reverse mortgage."