A reverse mortgage is a loan that allows you to get money from your home equity without having to sell your home. You may be able to borrow up to 55% of the current value of your home tax-free.
Eligibility for a reverse mortgage
To be eligible for a reverse mortgage, you must be:
- a homeowner
- at least 55 years old
If you have a spouse, both of you must be at least 55 years old to be eligible.
Qualifying for a reverse mortgage
To get a reverse mortgage, your lender will consider:
- your home equity
- where you live
- your age
- your home’s appraised value
- current interest rates
In general, the older you are and the more home equity you have when you apply for a reverse mortgage, the bigger your loan will be.
Accessing money with a reverse mortgage
You may choose to get the money from your loan through:
- lump-sum payment
- planned advances, giving you a regular income
- a combination of both of these options
You must first pay off any outstanding loans that are secured by the equity in your home with the funds you get from your reverse mortgage.
You can use the remainder of the loan for anything you wish, such as:
- pay for home improvements
- add to your retirement income
- cover healthcare expenses