Applying for a reverse mortgage? Dreaming about retirement is all fun and games until the day arrives, and you find that you don’t have enough money to do all the things you’ve been meaning to do all your life. More and more people are facing retirement in the clutches of financial hardship, but help is at hand. Those over the age of 62, who are in possession of their own properties, can turn to a reverse home loan to mediate their financial problems. DIY or with help from the state? A reverse mortgage can be taken out in one of two ways – from a private lender, such as a bank, in the form of a reverse mortgage, or through a government agency, in which case it is known as a home equity conversion mortgage and comes with the extra reassurance of being insured by the state. Federal laws around loans and lending apply to both options, and the only real difference is the government-backed insurance of a home equity conversion mortgage. Repayment terms The minute there’s a loan, there is instantly the implication of a repayment – or is it? In the case of a conventional home loan, yes. When you take out a regular loan, you agree to monthly repayments at a predetermined rate until the loan amount is paid back. Happily, reverse home loan is far more flexible, to such an extent that you don’t actually have to repay anything until the end of the loan period. When you move out of the house to which the loan is bonded, the loan will automatically come to an end, and only then will the full amount be due back to your lender. Can anyone qualify? In addition to being 62 years of age or over, you will also need to be the owner and permanent resident the house you wish to use as equity, which will end up being linked to the loan. The among of money that you are able to receive as a payout of the loan will be determined by which company you approach for your loan. Federal laws block you from taking out a loan to the full value of your house. The percentage of the home’s value that you will be able to receive in the form of a loan will be determined by a detailed background and credit check. These checks will investigate everything that could affect your financial status (and therefore your borrowing capacity). This includes whether or not you are up to date with your property and other taxes, whether your home insurance is up to date, and whether you are able to financially maintain and uphold your home and all its related running costs. Feeling at home A reverse mortgage can only be granted if you are both the owner and primary resident of the property that you wish to use as collateral for your loan. It doesn’t matter if you own a property with multiple residences on it – as long as you live in one of these residences as your primary dwelling, you will be permitted to apply.