bad Credit

Can I get a reverse mortgage with bad credit?

Can I get a reverse mortgage with bad credit?
Written by Publishing Team

Q: My wife and I are interested in a reverse mortgage. My wife is 72 years old and her income from Small Pension and Social Security is $1,000 a month. Its credit is good enough for loan programs. I am 65 years old and still work and also get Social Security. Our total monthly income is $4,500. My balance is not very good. We’ve lived in this house for 35 years and have $74,000 in it. The value is around $250,000. We want to stay home and make improvements with a reverse mortgage to come to about $45,000. Is this an option with my small balance?

– optimistic

A: Before entering into a reverse mortgage agreement, it is important that you and your spouse understand exactly what you will enter into.

As for qualification, it will depend.

Judy D’Agostini, a certified financial planner with Equity Advisors/Falcon Financial Group in Morristown, said reverse mortgage lenders will pool the credit scores of both spouses.

She said they would look at the average score for each of them, and if your score was less than 620, you might have a hard time qualifying.

D’Agostini said you might have to wait and try to fix your balance.

“Reverse mortgages require both parties to have good credit, but there must be no payments at least 24 months late for any expenses related to your home such as property taxes, home insurance and mortgages,” she said. “There is a possibility that you may currently be able to get the loan now, but they may require you to set aside enough money to pay your property taxes and insurance.”

It is also possible to just ask your spouse to apply for a reverse mortgage to increase her credit, she said.

“This can only happen at age 62 or older,” she said. “Because they are older, this may allow you to borrow more.”

Email your questions to Ask@NJMoneyHelp.com.

Karen Price Mueller writes a file tricked Column for NJ Advance Media and Founder NJMoneyHelp.com. Follow NJMoneyHelp on Twitter Tweet embed You find NJMoneyHelp on Facebook. sign for NJMoneyHelp.com‘s Electronic weekly newsletter.

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