Q. My spouse and I have an interest within the reverse mortgage. My spouse is 72 and her revenue from a small pension and Social Safety is $1,000 per 30 days. Her credit score is nice sufficient for mortgage applications. I’m 65, I nonetheless work and I additionally obtain Social Safety. Our complete month-to-month revenue is $4.500. My credit score just isn’t too good. We’ve lived on this residence 35 years and owe $74,000 on it. The worth is round $250,000. We wish to keep within the residence and do enhancements utilizing a reverse mortgage to entry about $45,000. Is that an choice with my so-so credit score?
A. Earlier than you enter right into a reverse mortgage settlement, it’s essential that you simply and your spouse perceive precisely what you’re moving into.
As for qualifying, it’ll rely.
Reverse mortgage lenders will accumulate credit score scores for each spouses, mentioned Jody D’Agostini, a licensed monetary planner with Equitable Advisors/The Falcon Monetary Group in Morristown.
They may have a look at the median rating for every, she mentioned, and in case your rating is beneath 620, you’ll have a tricky time qualifying.
D’Agostini mentioned you’ll have to attend and attempt to restore your credit score.
“Reverse mortgages require that each events have good credit score, however there ought to be no late funds for a minimum of 24 months for any bills associated to your property resembling property taxes, home-owner’s insurance coverage and mortgages,” she mentioned. “There’s a likelihood that you can at present get the mortgage now, however they could require you to put aside sufficient cash to pay your property taxes and insurance coverage.”
Additionally it is attainable to only have your spouse apply for the reverse mortgage leveraging her credit score, she mentioned.
“This will solely occur at age 62 or above,” she mentioned. “Since she is older, this may help you borrow extra.”
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Karin Worth Mueller writes the Bamboozled column for NJ Advance Media and is the founding father of NJMoneyHelp.com. Observe NJMoneyHelp on Twitter @NJMoneyHelp. Discover NJMoneyHelp on Fb. Join NJMoneyHelp.com’s weekly e-newsletter.