Reverse mortgages continue to gain in popularity.  One of the first reverse mortgages was created by HUD’s Federal Housing Administration.  These mortgages allow older Americans to withdraw some of the value that is in their home.  It allows you to use the money to supplement social security, handle unexpected emergencies, or make home improvements.  For most seniors their home is one of their largest investments.  It is a good idea that you take some time to really understand reverse mortgages before deciding if you need one. 

Reverse mortgages are a type of home loan that enables you to turn some of the equity you have in your home into cash you can use.  Over the years your equity has most likely risen as you have made your mortgage payments and property values have gone up.  Unlike a regular second mortgage you will not need to make payments on this loan until you are no longer living in the house.  

To qualify for a HUD reverse mortgage you will need to be at least 62 years old and either own your home outright or have a low balance that could be paid off at the closing with the proceeds.  You also need to live in the home.  You can apply for a HUD reverse mortgage even if the loan you have now is not FHA insured.  The new loan you receive will be FHA insured.  

To qualify for a HUD reverse mortgage the homes must be either a single family home  or a 1-4 unit home with at least one unit occupied by the homeowner.  Condominiums and manufactured homes might also be eligible for HUD reverse mortgages.  With a reserve mortgage you do not need a specific income to debt ratio in order to qualify.  The money from your reverse mortgage will be paid to you regardless of your income.  The amount you will be allowed to borrow will depend on your age, the interest rate, and your home’s appraised value.