I went to the AARP website and did not find any statement that the current mortgage need be paid in full to qualify. AARP is not a lender and does not underwrite or fund mortgage loans. I am not the kinda guy that needs to build myself up by pointing out mistatements of others but this issue is more important than any individual ego.

Their are may types of Home Equity Conversion Mortages (HECM's) to choose from and I believe it is important that you (and others) don't disqualify yourselves from a program that potentially enables you to live in your own home for the remainder of your life without worrying about mortgage payments just because you may still have a small remaining loan balance.

Especially with the holidays upon us, it pains me to think of elderly individuals being forced to make decisions about selling their homes and the lifetime of memories they have because of their current mortgage payments.

The short answer is no. Reverse mortgages are REFINANCE ONLY, never purchase money.

Here's a link below with a good, clear discussion of reverse mortgages.

The reverse mortagage has to be the primary lien/loan. So the whole house has to be paid in full, including any liens. An insured loan is only made to owner/occupiers that are 62y or older until they sell, die, or move out. Then all the loaned money has to be paid back. The details are at the site below.

Reverse mortgages require substantial equity to qualify. Generally at least 75%. Think of them as home equity lines you don't make payments on - till you or your heirs sell the property. Owner(s) must also be over 62. You can learn more about these programs visiting my blog on this subject on the "shopping around" page of my website. Greg Z

Ruth,

My father found out he couldn't take it with him, so he decided not to go.

Are you saying that your house was foreclosed? Or are you saying that you want to buy a foreclosure? A reverse mortgage is for someone who owns a house free and clear. For example, if you live in a home that doesn't have any mortgage payments and you are owner, then you give your home as collateral to the mortgage company and they send you a monthly check. After several years, you would then have to sell the house for more than is owned on the home.

I hope this explains things a little better. The idea of a reverse mortgage is for senior citizens who spent 30 year paying off their homes and now need money after retirement. They figure, "You can't take it with you" and they will probably die before they exhaust the equity in the home.
Ruth

You can do a reverse mortgage on any property as long as it is paid off. As long as the bank doesn't own it anymore you should be fine.