Age Requirements for Reverse Mortgages
Age and Loan Amounts
Applicants’ ages typically play into their approval in several notable ways. While the basic age requirement for approval involves a person being at least 65 years of age, the program is actually designed to award higher loan amounts to people who are older than 65. In fact, people who are 65 or just a few years older may receive lower loan amounts than people who are well beyond that age. It is true that the older a person is at the time of his or her application, the higher the amount for which this person may be approved.
With that, people who want to receive the highest amount possible for their HECM may do well to wait a few years after retiring to apply for this loan. Some financial experts advise people to live on their pensions and savings for as long as they can and then take advantage of the reverse mortgage program later in their retirements. This advice can help people receive the greatest amount of money possible for their home’s equity and also let them live out the rest of their retirements comfortably.
Co-Applications and Spousal Age
Many married couples prefer to apply for reverse mortgages together. If both spouses are 65 or older, their approval amount may correspond to the age of the older applicant. However, if one spouse is under the age of 65, this person must be left off the application. The loan can only be given to the spouse who is 65 or older.
However, once the younger spouse reaches the minimum age requirement, it may be possible for the married couple to refinance their loan or apply for a new reverse mortgage together. To do so, they must first pay off the existing HECM on their home. They also must have successfully met the other criteria for the initial reverse mortgage.
Reverse mortgages help seniors fund their retirements or supplement existing income from their pensions and Social Security payments. However, before they apply for this unique form of financing, seniors should understand the age requirements and how their age may affect the amount of money for which they might be approved. They also should know whether or not they will be able to apply for an HECM with their spouse.