Do I Need a Good Credit Score for a Reverse Mortgage?

When considering a reverse mortgage, having a great credit score will really help your application.  But if you don’t have a good credit score, will that prevent you from getting a reverse mortgage?  

You can expect a bank to run a credit check when applying for a loan.  Oftentimes, a credit score of 600 or below might be an issue with the bank.  When it comes to a reverse mortgage, this isn’t necessarily the case.

As I’ve been researching a reverse mortgage, I’ve gotten into some of the details that aren’t always top of mind for borrowers.  Credit scores are definitely one of them.  I’ve also found that there really isn’t a hard and fast number that you’ll need to secure the loan.

I had contacted a mortgage broker to learn more about this.  What he told me was that a credit check is part of the initial application process.  However, if the credit score is less than ideal, the bank may ask for more information.  What they are looking for is your history of paying bills on time.  Remember that a reverse mortgage is a loan, so there is risk for the bank even though they are making payments to you (the borrower).

Banks may need more information for a low credit score.  They might take the context of the credit score into account.  This means that anyone with a lower credit score still may be eligible for a reverse mortgage.

Of course, there are ways that you can improve your credit score as well if you are considering a reverse mortgage.  You can do things like pay off existing debt.  It’s also a good idea not to take on any new debt before applying for a loan like a reverse mortgage.

The bottom line is that banks review the context of the credit score along with the actual number.  So don’t hesitate to ask a lender for more information if your credit score isn’t the best, and you are considering a reverse mortgage.