This could be a great way for your aging parent to stay in their home. It has many pros and cons. To be eligible for this type of loan (HECM reverse mortgage), the Federal Housing Administration (FHA) says that you only need to be age 62 or older. The home must be owned free and clear or all existing liens must be satisfied with proceeds from the reverse mortgage. If there is an existing mortgage balance, it can be paid off completely with the proceeds of the reverse mortgage loan at closing. Generally, there are no credit score requirements for a reverse mortgage. With all that being said, is staying in the home the best idea for your aging parent? Some questions you can ask yourself:
- If they stay, will they be able to take care of themselves or will they need some assistance?
- Is their home free and clear of clutter to make for a safe environment?
- Should their home need to be made handicap accessible?
- Who can will you get to come in and help them with assistance?
- Would they be safer in a retirement community with other senior’s?
- Is their home in need of maintenance or upkeep that will be difficult for them to maintain?
- Would they be better off selling and taking their equity out now?
If you would like to talk more about your aging parent’s options feel free to call or email me.