One of the creative ways a reverse mortgage can be used is in underfunded divorce for people. The reverse mortgage qualifying factors for this loan are a minimum age of 55, prevailing interest rates, available equity in the property and a moderate credit rating, although some reverse mortgage lenders do not have a minimum credit rating.
How can a reverse mortgage play a role in a divorce? If a spouse wants to stay in their existing home and cannot income qualify for a cash out conventional real estate loan (to buy out the departing spouse) due to a lack of income, the reverse mortgage may possibly help since income qualifying is much easier since the new mortgage payment is not included as a debt to be repaid. Reverse mortgages do not require a monthly mortgage payment to be made to pay it back. The interest that accumulates daily, unpaid, gets added to the balance of the loan and gets paid once the loan is to be refinanced or paid off when the home sells.
I have made a video to explain more on this concept with examples, click here to watch it and feel free to fill out the form below and let me know your situation.
Feel free to watch other videos by clicking the Educational Videos button and read some of the other articles under the Learning Center tab.
Thanks for visiting my site!
KW