The one constant in life is change, right? It’s no different in the reverse mortgage industry. Reverse mortgage age minimums have changed significantly in recent years. Today, they’re more flexible than ever.
It used to be that there was only one reverse mortgage product available. Many homeowners are surprised to learn that there are new options with more flexible age requirements available today.
Before we dig into the new age requirement for reverse mortgages, let’s first cover some basics about how reverse mortgages actually work. There are a lot of myths and misconceptions floating around out there.
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First, A Few Basics
A reverse mortgage is a unique home loan that offers homeowners access to home equity without giving up home ownership or taking on a mortgage payment.
The most popular reverse mortgage today is the FHA-insured home equity conversion mortgage, or HECM (commonly pronounced heck-um by industry insiders). The HECM was signed into law by President Reagan as part of the Housing and Community Development Act of 1987.
No mortgage payments are required as long as at least one borrower (or non-borrowing spouse) lives in and maintains the home and pays the property taxes, homeowner’s insurance, and HOA dues (if applicable).
You remain the owner of your home and you’re free to leave it to your heirs. Your heirs will inherit the remaining equity in your home.
The HECM is non-recourse, which means FHA covers any shortage if your home isn’t worth enough to pay off the entire balance.
The HECM is flexible and customizable; your lender can tailor it to your individual financial goals and needs. You can take proceeds as a lump sum, line of credit, term/tenure income, or some combination of these options.
Seniors commonly use the proceeds to eliminate existing mortgage or other debt payments, fund home improvements and repairs, pay medical bills, supplement income, and supplement retirement assets.
If you’d like more information about how a HECM reverse mortgage works, check out the video below.
Many lenders also offer proprietary (or “jumbo”) reverse mortgages designed for homeowners with home values of $1 million or more. We focus mainly on the HECM on this site, but we’ll cover the jumbo reverse mortgage age requirement as well.
Reverse Mortgage Age Requirements
The reverse mortgage age minimums have changed quite a bit over recent years. It used to be that the HECM was the only game in town, but lenders have introduced proprietary (or “jumbo”) reverse mortgages designed for homeowners with high home values.
The minimum reverse mortgage age today depends on your marital status and whether or not you’re applying for a HECM or a jumbo reverse mortgage. The jumbo reverse mortgage age minimums are different than the HECM reverse mortgage age minimums.
Again, we focus mainly on the HECM on this site, but we’ll cover the current age minimums for both HECM and jumbo reverse mortgages.
HECM Reverse Mortgage Minimum Age
A HECM reverse mortgage will likely make the most sense if your home is worth less than the FHA lending limit. The minimum age for a HECM depends on the marital status of the borrowers:
- Unmarried single borrower – Must be at least 62.
- More than one unmarried borrower – All borrowers must be at least 62.
- Married borrowers – Only one spouse needs to be 62. The other spouse can qualify as a non-borrowing spouse.
The earliest date you can apply for a HECM is 60 days before you turn 62. The earliest date your HECM can fund is your birthday.
Jumbo Reverse Mortgage Minimum Age
If your home is worth more than the FHA lending limit, you may also want to look at a jumbo reverse mortgage. The age requirements for a jumbo are different than for a HECM:
- Unmarried single borrower – Must be at least 55.
- More than one unmarried borrower – All borrowers must be at least 55.
- Married borrowers – All borrowers must be at least 55. Jumbo lenders typically don’t offer the option to qualify as a non-borrowing spouse.
Keep in mind that proprietary jumbo reverse mortgages are not regulated by FHA, so lending guidelines can change at any time. These are the jumbo reverse mortgage age minimums as of this writing.
How Age Impacts Reverse Mortgage Proceeds
The age requirement for reverse mortgages is unique among home loan products. Age is important because it helps determine how much you can get from a reverse mortgage.
To calculate proceeds, your lender first uses the age of the youngest borrower (or non-borrowing spouse) and the expected interest rate (EIR) to determine the applicable principal limit factor (PL factor). The principal limit factor is then multiplied by the maximum claim amount (equal to the appraised value for most people) to determine the principal limit.
The principal limit is the initial proceeds available from the reverse mortgage. It’s basically the bag of money from which you can pay off existing mortgages, other debts, fund home improvements, etc.
Your age plays a very important role in determining how much you qualify for. Older borrowers tend to qualify for larger principal limits than younger borrowers.
To see how this works, let’s look at an example. Let’s assume we’re comparing two borrowers, a 65-year old and an 85-year old, and both have free and clear homes worth $250,000.
Using our basic PL calculator, we get the following principal limits (using the PL tables in effect as of June 2019):
- 65-year old: $107,500
- 85-year old: $147,750
As you can see, the 85-year old qualifies for about $40,000 more than the 65-year old in this scenario. Again, older borrowers tend to qualify for more money than younger borrowers.
Should I Wait Until I’m Older?
Since the reverse mortgage offers more as you get older, should you wait to qualify at an older age? Probably not. There’s really not much difference between the proceeds for a 75-year old and a 76-year old (assuming all other qualifications are the same, of course). Waiting a year or two doesn’t usually result in significantly more proceeds.
If you wait 5 or 10 years, then yes, the proceeds can be significantly more – assuming home values and interest rates don’t change. If home values fall or interest rates increase, you could end up with less even though you’re older. Age is important, but there are multiple variables that go into how much you can get.
If a reverse mortgage is beneficial today, then it probably makes sense to get it today. If home values increase or interest rates decrease, you can always look at refinancing your reverse mortgage to get more money.
How Lenders Verify Your Age
Age is an important part of qualifying and calculating proceeds, so lenders will require you to document your age. Lenders will request each borrower or non-borrowing spouse to provide one of the following documents:
- State-issued driver’s license or ID card (cannot be expired)
- Birth certificate
- Passport (cannot be expired)
- Letter from the Social Security Administration
- Form N-550 or N-570 Certificate of United States Naturalization
Expert Tip
If a reverse mortgage is beneficial today, it usually doesn’t make sense to put off getting one for the sake of qualifying at a higher age. A difference of a year or two typically doesn’t impact proceeds a whole lot.
Can I get a reverse mortgage at age 58?
If you have a high home value, then yes, you may be able to get a reverse mortgage at age 58. The jumbo reverse mortgage age requirement is currently 55.
Do both people have to be 62 for a reverse mortgage?
If you’re married, only one spouse needs to be at least 62 if you apply for a HECM reverse mortgage. The other spouse can qualify as a non-borrowing spouse.
How old do you have to be to get a reverse mortgage?
If you apply for a HECM reverse mortgage, the minimum age is 62. However, other reverse mortgage products are available that have lower minimum ages.
