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What are the rules for reverse mortgages?

Can you get a reverse mortgage if there is a tax lien on the property? What if you have already declared bankruptcy and the only thing you still have is your house?
Status: Open    Jun 15, 2015 - 12:02 AM

Finance, Senior Real Estate

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Expert Answers

Jul 01, 2015 - 09:07 AM

With your situation its not as straight forward as it used to be but the answer to your question is YES! To the tax lien and if the bankruptcy has been discharged that answer is yes also as long as you pass the financial assessment that HUD requires. There has to be enough equity in your home to cover any lien on the property and other costs. Please contact me if you would like more in depth information regarding your particular situation.

Thank you.

Jul 01, 2015 - 11:41 AM

With regard to a tax lien on the home, a borrower may be able to obtain a reverse mortgage if the borrower qualifies for enough money to pay off the tax lien. Proceeds from the reverse mortgage must pay off the tax lien or any other lien against the house before dispersing any monies to the borrower. If the borrower does not qualify for enough money to pay off the liens on the house, the borrower may still be able to qualify for a reverse mortgage, but they will need to bring additional funds to closing.

As far as the bankruptcy, a borrower may be able to qualify for a reverse mortgage, but it will depend on the type of bankruptcy filed, the current stage of the bankruptcy, and the borrower’s specific circumstances. It would be best to call your local reverse mortgage professional.

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