Can I Get a Reverse Mortgage If I’m In Foreclosure?
The short answer is…MAYBE. But read on and I’ll do my best to give you the reverse mortgage foreclosure “guidelines”.
FIRST SOME HISTORY…
Back before May of 2015, anybody in any situation could get a reverse mortgage. They’d just need to be 62 or older and have some equity. Income, credit and mortgage lates didn’t matter.
But then the good ol’ government cracked down. The crew down at the HUD and the FHA took a look at statistics, which showed that folks who had been late on their mortgage(or taxes) more than once were pretty likely to default on their property taxes in the future.
Knowing that tax defaults eventually lead to a foreclosure, we(the reverse mortgage industry) wanted to make sure that the folks who got reverse mortgages were protected from that sort of mess.
HERE’S WHAT WE DID(AND WHY IT ANSWERS YOUR QUESTION)
Now, any senior who has a history of mortgage lates, tax lates or is currently in foreclosure will have a couple of extra steps to their reverse mortgage.
First, we will require the reverse mortgage loan to pay off their mortgage(and anything else secured) on title. That will take care of the foreclosure.
Next, we will escrow their property taxes and homeowners insurance for their lifetime expectancy.
THIS WILL ENSURE THAT THE SENIOR WILL BE ABLE TO SUSTAIN THEMSELVES IN THEIR HOME FOREVER, AND WON’T EVER BE ABLE TO LOSE HIS OR HER HOME
Now, what’s the downside?
Quite honestly, fewer seniors in this situation will qualify. This is because the loan size will need to be big enough to both pay off the mortgage and fund the lifetime expectancy set aside.
HOW DO I FIGURE OUT IF I QUALIFY EVEN IF I’M IN FORECLOSURE?
Here are some guidelines. If you’re in your 60’s, you need to have at least 60% equity. For example, if your home is worth $300,000, you’ll need to owe less than $120,000 for this to work.
If you’re in your 70’s, you’ll need to have 55% equity. And when you get to your 80’s and beyond, you’ll need right around 40-50% equity to get a reverse mortgage that pays off your foreclosure.
These are just guidelines though. Your approval will depend on your age, how much you currently owe, and how much your annual taxes and other homeowners charges are.
The only way to truly know if you qualify is reach out(really, there are no lifetime expectancy set-aside calculators available to the public).
On our call, we’ll need to know the following…
✔ YOUR AGE
✔HOW MUCH IS OWED ON YOUR HOME(THE ENTIRE AMOUNT INCLUDING ATTORNEYS FEES ETC)
✔YOUR APPROXIMATE HOME VALUE
✔YOUR ANNUAL TAX AND HOMEOWNERS INSURANCE BILL
Then, we’ll calculate if you can qualify. If you can get a reverse mortgage, you will no longer need to pay your mortgage, property taxes or homeowners insurance.
On the other hand, if you CAN’T qualify(like I said, not everybody will qualify for this) we’ll let you know immediately. Then, we’ll go over other options that you might have besides the reverse mortgage.
For every single person we help, our goal for you is to save enough money so you can live financially comfortable in your home for the rest of your life.
Feel free to reach out to us at (267) 289 1095 or email email@example.com if you’d like to see if a reverse mortgage can pay off your foreclosure and save your home.