Reverse mortgages use residual income, not debt-to-income ratios, to verify borrowers can pay property taxes and insurance. A single borrower on the West Coast needs at least $589 monthly residual income after regular expenses. HUD sets these thresholds by family size and location.
You have to have an income to foreseeably stay there and maintain your property charges. HUD, the Housing and Urban Development, created within the underwriting guidelines of the reverse mortgage program something that's called financial assessment. And us lenders are required to take a look under the hood of what your income is. There's no debt-to-income ratio on a reverse mortgage. That's a little different from a traditional loan where what we have is what's called residual income requirements. So residual income means how much income do you have that's left over in your, you know, coming in? That could be from Social Security, by the way. That could be from a pension. We're just looking for a nominal amount, a family size. Let's say the West Coast of one person, $589 a month. That's in the residual income table that underwriters are required to check to make sure at least that borrowers who are taking a reverse mortgage loan out have the means to afford their own property taxes and their homeowner's insurance.
