Credit

There is no minimum credit score required on a Home Equity Conversion Mortgage (“HECM”). What the lender cares about is that you made your mortgage and other installment debt payments regularly. The rules in general are as follows:

  • For the last 12 months, you had no more than 2X30 day late exceptions in the previous 24 months. (Applies to all properties, retained second homes, rentals, etc.).
  • On revolving credit, you shouldn’t have more than 3X60 day late payments or any more than 1X90 day late payments in the last 12 months.
  • On a HECM for Purchase transaction FHA likes there to be no more than 2X30 late payments on mortgages or installment in months 13-24.
  • Property taxes must be paid current in the last 24 months for each property you plan to retain, including the primary residence you are obtaining a HECM loan on.
  • Home Owner Insurance/Flood Insurance: must have had in place for 12 months, if it was required, for all properties.

Any of these late payments can be negated (set to one side) with a clear explanation of the unforeseen circumstances that caused them. For example, if you were laid off or had a death in the family, allowances are made for such unusual events.

Would you like to learn more?

  • Click here for eBrochures, eBooks, FAQs and Videos!
  • If you would like to know how much you potentially qualify for, and whether you possibly have adequate monthly cash flow, go to the HECM WIZARD and input your information.
  • If you would like to reach out and talk with me, fill out the information on Contact Me or email at st.john.bannon@JMCapGroup.com