When a person reaches that age when it's close to retirement, they begin dreaming about how the retirement years are going to be. Some make plans for travels, some for investing in businesses they always thought are great, and some are trying to find a way to continue or finally start living the way they deserve. Whatever the plan is, a senior person to be, realizes they'll need more money than the regular pension will be.
A senior person simply can't get a standard loan from the banks. Banks see the older people not enough eligible for regular loans because of their age. They are simply not sure whether it's cost-effective to borrow the money.
This is why the banks invented something called a reverse mortgage. This is a special kind of loan that's made to be suitable for both senior citizens and the banks. This means that a person that's about to ask for a loan, must meet certain conditions. The first and most important is to have a property that will be placed under mortgage, and the other is to reach a certain age. This part is different from bank to bank. Some banks ask their customers to have a minimum of 60 years, but there are no banks that go lower.
So how old for reverse mortgage a person should be? There's no certain and one answer. How old for reverse mortgage is a question that must be researched thoroughly and ask every bank one by one. Some banks might give a loan to younger people, but they might have bad interest rates, so you need to take everything into consideration before you ask for a reverse mortgage.
Most often age requirement is 65. This is calculated as the best age for both the asker of a loan and for the banks. If the person is younger, the interest rates will "eat" the property and the bank will lose money. If the person is older, the probability that they'll live longer drops and the value of the property that the bank will eventually get is also smaller.
So if we have to answer the question of how old for reverse mortgage - this is probably the best answer - 65. But how it actually works?
The bank places a mortgage on the property that the person asking for a loan has. The senior citizen gets a lump sum or a monthly payment and in return, the bank gets an equity of the shares of that property. When the person passes away or decides to sell the property, the bank gets their share of it. The good part is that the equity can never become more expensive than the value of the property. A person can live 110 years, and their ancestors will have no obligation to pay back anything in their name. On the other hand, the senior citizen that asked for a loan has no obligation to return a single cent, ever. It's a win-win situation.