Hawaii Reverse Mortgage Requirements

Hawaii Reverse Mortgage Requirements
For some retirees, a reverse mortgage in Hawaii could be a lifesaver. Under the right circumstances, the reverse mortgage will allow you to live in the house for the rest of your life, without having to make a mortgage payment.
Many lenders only tell you about the “qualification” requirements of a Reverse Mortgage in Hawaii, i.e., that you must be 62 or over, minimum income requirements & credit requirements compared to a forward/conventional loan and about 40 – 50% equity available. However, there are also some requirements after the loan closes and you have your cash in hand or you have eliminated your mortgage payment. And, though the loan is non-recourse, meaning you can live in the home for as long as you live, even if you outlive the equity, you will never lose your home. But there are a few circumstances where you could go into foreclosure and potentially lose your home:

  1. Failure to Pay the Bills

Once the loan close you will be responsible for covering both the homeowner's insurance as well as the property taxes. For some retirees, this task can be easy to overlook. It is important to understand that when you are paying a conventional/forward mortgage your monthly mortgage payment to the bank will include principal and interest, as well as your homeowners insurance and property tax. Therefore it is easy to overlook or to save the money for when they are due. Failing to keep up with these payments could lead to foreclosure of your house.

  1. Moving Out of the Residence for Any Reason

When considering a reverse mortgage, Hawaii retirees need to understand that they are required to stay in their home as their primary residence. If they move out, for any reason, or move into a nursing home, the bank will have the right to “call” the loan. This only applies if “both” owners leave. It is ok to vacation as long as you remain in your residence for at least 6 months & one day each year, so staying at your vacation home part of the year is absolutely fine.

  1. Letting the Condition of the Home Deteriorate

Because your bank has a lien on your home, just like your conventional loan, the bank has a vested interest in ensuring that the condition of your home is up to FHA standards at all times.
While this stipulation does not mean that you have to remodel it, or give it a meticulous cleaning daily, it does imply following common sense guides when it comes to its upkeep. For example, the roof must always be in good shape.
In conclusion, consult the author of this article or your financial advisor to discuss the pros and cons, or to answer your personal concerns.
For a FREE, no-obligation quote, contact Daniel Nicolosi at Harbor Financial Group – Your Aloha Mortgage Solution in Honolulu. You can reach him directly at (808) 799-8218 on Oahu; or Toll Free at 888-423-2468 from the Neighbor Islands.


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