For many Florida seniors, a reverse mortgage can be a lifeline in retirement - offering access to tax-free cash, no monthly mortgage payments, and the ability to age in place. But before any funds are disbursed, borrowers must first go through a reverse mortgage financial assessment. This step helps ensure long-term success with the loan and prevents future financial hardship.

At Florida’s Best Reverse Mortgage Company, we make this process simple, transparent, and tailored to the unique financial needs of Florida homeowners.

What Is the Financial Assessment?
The financial assessment is a review conducted by the lender to ensure you can continue meeting your basic housing obligations after receiving a reverse mortgage. Unlike a traditional loan, a reverse mortgage doesn’t require income to qualify - but it does require that you’re able to afford:

• Property taxes

• Homeowners insurance

• Home maintenance

• HOA fees (if applicable)

• Flood insurance (if in a designated zone)

In short, the financial assessment is about staying in your home safely and securely for years to come.

Why Was It Introduced?
The financial assessment became mandatory in 2015 as part of the FHA’s efforts to strengthen the HECM (Home Equity Conversion Mortgage) program. Before this change, some borrowers struggled with housing costs even after getting a reverse mortgage. By requiring a financial checkup before closing, the FHA ensures the program serves its true purpose: helping seniors stay in their homes comfortably.

What’s Included in the Assessment?
During the financial assessment, the lender will evaluate:

• Credit history: Have you paid property taxes, insurance, and other housing expenses on time in the past?

• Income: Sources such as Social Security, pensions, investments, rental income, and annuities are all considered.

• Debts: The lender will look at recurring debts like credit cards, car loans, or personal loans.

• Residual income: This refers to how much money you have left after covering monthly obligations. The FHA sets minimums based on household size and region.

This process is not meant to be intimidating - it’s simply a safety check to ensure the reverse mortgage helps your financial picture rather than complicating it.

What If You Don’t Qualify Based on the Assessment?
If the assessment shows you may have trouble paying taxes or insurance down the road, there’s a built-in solution: the Life Expectancy Set-Aside (LESA).
A LESA sets aside a portion of your reverse mortgage funds to cover these costs automatically. It means you won’t have to worry about budgeting for property taxes or insurance - they’ll be paid directly from the loan. While it may reduce the amount of immediate funds available to you, it adds tremendous peace of mind.
Many Florida homeowners, especially those on fixed incomes, find that a LESA makes the reverse mortgage work better for their long-term needs.

Florida-Specific Considerations
Florida seniors face some unique circumstances that can influence the financial assessment:

• High homeowners insurance premiums, especially in coastal or hurricane-prone areas

• Flood insurance requirements in many parts of the state

• HOA dues in popular retirement communities or condo associations

A knowledgeable local reverse mortgage professional - like the team at Florida’s Best Reverse Mortgage Company - can help you navigate these issues and prepare the strongest application possible.

The Bottom Line
The financial assessment is a crucial part of the reverse mortgage process - but it’s not something to fear. Think of it as a way to make sure your reverse mortgage supports a safe, stress-free retirement. With the right preparation and guidance, most borrowers pass this step easily, and solutions like the LESA are available for those who need a little extra support.
If you’re considering a reverse mortgage in Florida, our local experts are here to help. We’ll walk you through the financial assessment, explain your options, and help you determine whether a HECM is right for your needs.

Contact Florida’s Best Reverse Mortgage Company Today
Ready to see how much you qualify for - or just want a second opinion? Call us today for a free consultation with one of our friendly Florida-based reverse mortgage specialists.
Your future deserves the best.