The quick answer is “no”, it’s a completely different type of mortgage than a traditional one which just about everyone is familiar with if you have ever purchased a home or done a refinance.
They are not Underwritten using “debt to income” ratios, FICO scores or “Loan-to-Value” calculations but use the potential borrowers’ net cash flow after all housing expenses have been deducted along with any credit card debt, slickcashloan.com and utilities.
Included in this overview is a 24 month history of property taxes, Homeowners Insurance and any HOA fees to verify that they have been paid on time.
A credit report is done to determine if there have been any late payments on credit cards or installment loans for the previous 24 months.
If there have been some late payments during that period of time, the Lender will request a letter of explanation and may require part of the funds from the reverse loan to be set aside in an escrow account to pay ongoing housing expenses.
I’m frequently asked how long it will take for a loan to be completed and that depends upon the cooperation of the borrower when they are asked to provide all the documents that are needed at the point of the application.