Reverse mortgages question, age 62+?
What is the reason why you can't make a reverse mortgage until you are age 62?
Why not 60 or 57?
Note: No comments on how bad they are and how they are ripping people off.
I'm just curious
- Anonymous9 years agoFavorite Answer
The bank has to set a minimum age because they want to make sure that you die before the mortgage balance gets up to the point where you're running out of equity. they have to pick a cut-off age somewhere, so it could have been 60 or 57 or whatever, but each year they move it down they take a little bit more risk. I guess 62 was the age where they figured they were still safe but they wouldn't lose too much by giving up business from people who wanted the reverse mortgage but didn't meet the age requirement.
Also, 62 is the age where you can get early social security benefits, so that probably played a big part in it.
- mscLv 69 years ago
A reverse mortgage is a loan that's made to a homeowner in the form of monthly payments that last for the rest of his or her life. The homeowner never has to repay the loan as long as he or she is living in the house. When the homeowner dies, the house is sold to repay the loan.
If you live too long, you could end up receiving more from the loan than the house is worth, and the bank would cover that loss. That's why they don't want you to apply too young -- because they're making a bet on your lifespan.
- Anonymous6 years ago
all banks are crooks and don't give a damn accept their profits so all banks can go fly a kite. i qulify for a reverse mortgage and get hit often by lenders and i tell them to go find a jew, yes i'm aniti
semetic and i hate jews.
- 9 years ago
They want to make certain that one will be ready to leave at the end if one wants to sell their house on an installment plan, which is what these arrangements turn out to be.
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- Anonymous9 years ago