HECM & Reverse Mortgage Credit Qualifications - YouTube

Hey there, thanks for stopping by the channel.

This is Shawn with Reversed TV and today I’ll be talking about Reverse Mortgage Credit Requirements.

I’ll be talking about this on a real low level.

Obviously I can’t include every single factor.

So, with that said, let’s just go ahead and dive in real quick.

First and foremost, a Reverse Mortgage, at least the federally insured Reverse Mortgage

through FHA does not have any minimum credit score requirements nor does your credit score

impact the interest rate or anything like that.

So here’s what we DO look at.

We basically look at your 1 to 2 year payment history on housing, installments, and revolving

credit.

I’ll explain each of those and what we look for as we delve further ahead.

Alright, so number 1; we look at your most recent 12 month history housing and installments.

If you have no 30 days lates, meaning you paid on time over the last 12 for housing

and installments you’re considered to have satisfactory credit (at least for this part

of the financial assessment).

So, what does housing include?

It includes things like your mortgage payment (obviously), it includes your property tax

payments, and also things like your homeowner association dues.

Now, if you paid 10 days late, that’s not technically late.

You’re really just late once you’re 30 days late or more, ok.

Further, we look at an actual 2 year history for the housing and installments.

Ove the last 2 years you’re actually aloud up to two 30 day lates on housing and installments

and we already talked about what is included in housing expenses that we look at, but what’s

included in the installments?

This would include things like a car payment or even student loans.

So, moving on, what do we look at in terms of your revolving?

So, first off, revolving would include things like credit cards.

Ok.

And, we’re extremely liberal in terms of what you’re aloud to have in terms of late

payments with your revolving debt.

So, you can have any number of 30 day lates over the last year and it’s ok (of course

it’s always up to the underwriter’s discretion), but you can have two or three or four 30 days

lates on your revolving, your credit cards, and still be ok.

Uh, when there starts to be an issue is if you’re 90 days late of more and you’re

actually aloud to have up to two 60 day lates on your revolving credit.

Anything more than that, then we’ll have to do an escrow account for the reverse mortgage.

It’s actually called a Life Expectancy Set Aside.

We use the acronym LESA.

L-E-S-A.

So that’s pretty neat with the reverse mortgage.

If you don’t pass the financial assessment, it doesn’t mean you can’t get the loan,

it just means that in an effort to make sure that you have the ability to pay your taxes

and insurance we’ll require you to have this escrow account where we take a portion

of the loan proceeds, set it aside, so that the servicer can pay your taxes and insurance

for you for the rest of your life expectancy.

Uh, that sorta guarantees or helps to guarantee that you’ll be successful as you age in

place in your residence.

With that said, if you have any other scenarios not covered, you’ll just want to check in

with your loan officer.

Obviously it’s a short video.

I can’t cover every single thing in terms of your credit.

I appreciate you stopping by.

Feel free to visit our website and get your free reverse mortgage information kit.

Down in the description below, you’ll find a link to one of our websites where you can

actually go ahead and pick up that reverse mortgage information kit.

Thanks again for stopping by Reversed TV.

Don’t forget to subscribe so you can find out more about reverse mortgage with some

of the videos we put out in the future.

Thank you very much.