Handling our finances when we are either approaching retirement or in the early stages of it can be a challenge that not many people think about until they are actually facing it. Our decisions earlier in life like mortgages and credit scores can have a big impact on it, too – even mistakes that we made decades ago!
Are there still options for mortgages, though? Well, one is known as a reverse mortgage credit score. If you would like to learn more about those and how they work, I will be providing some details about them in this article.
What is a Mortgage?
Now, most people are already familiar with what these are. Still, I think it is a good idea to mention them briefly, if just to set the stage for the rest of this topic. You can get a few further details here: https://www.forbes.com/advisor/mortgages/what-is-a-mortgage/. Essentially, it is a loan that people take out from a bank to help pay for a home (minus the down payment that is due at the time of a purchase).
As with most other types of loans, they are paid off over time and interest is charged. The main difference is these are made against property, so if you fail to repay, the bank can seize your property. These are known as foreclosures.
What is a Reverse Mortgage Loan, then?
The most important thing to know about them is that they are a form of financing. They let a homeowner borrow against the equity of their property. They are typically only available for homeowners who are age sixty-two or older, so do keep that in mind if you are looking to pursue one.
As far as the loan goes, there are a few options for how you can receive the funds. For example, you could get it in a lump sum, or as a fixed payment each month, or even as a line of credit. There are several ways to go about finding out a reverse mortgage credit score requirement, so keep your mind open to the different possibilities.
What Can We Use Them For?
So, why would we bother taking out a loan like this, anyway? After all, trying to sort out the required credit score and making sure that we qualify can be a bit of a hassle. Well, there are plenty of applications for them.
For one thing, they can help you with your day-to-day expenses. Sure, most of us who are retired do have some money from our individual retirement accounts, pensions, or other avenues such as social security. However, things still can add up faster than we even realize it!
So, you could utilize these funds to improve your lifestyle overall. Additionally, they could be used for funding any home repairs or improvements that have been on your to-do list for a long time. Those things can certainly be expensive!
Additional cash flow or income could definitely be used for something like that, which can also lend into that improved lifestyle that I mentioned. On a slightly less cheery note, they can be used for paying off medical bills. Another fact of life is that those tend to add up the more that we age.
So, those are just a few of the potential reasons people might get a reverse mortgage loan. There are more, but I will not bore you with any more lists. Consider asking around and see if anyone you know has had one!
So – What are the Credit Requirements?
In some ways, it is quite crazy that three little numbers govern so much of our lives. Yet, that is exactly what credit scores do to many people across the world. You can read more about them in this article, but more likely than not you are already familiar with them at least to some extent. It is hard to get into retirement without having to deal with them in some manner or another.
What is so nice about these types of loans though is that there is not a specific numerical requirement in terms of your FICO score. Rather, lenders who are going through the Department of Housing and Urban Development are simply going to look at your payment history. That is the most important thing that they will look at.
Now, if you do have a lower score, they will probably conduct some research to see why that is the case. This is so that they can determine if there were any extenuating circumstances, which will have an impact on whether you will get approved or not.
All in all, there are typically less hoops to jump through with these loans than other types. That is certainly good to hear, as who wants to spend a bunch of time worrying about these things?