Reverse Mortgages

[driftless]

I was listening to a piece on radio today about reverse mortgages, what effect do they have on the borrower's FICO score?  I ask because I am guessing that some of the folks who take out reverse mortgages will soon be applying to assisted living, etc, facilities?  

[medicgrrl]

I would think a person that takes out a reverse mortgage plans to stay in their house for the long term.

[driftless]

Given this is the "Understanding FICO Scoring" sub-forum I am asking what affect a reverse mortgage has on a FICO score? 

[medicgrrl]

Ok, your comment just kinda threw me off in regards to people going into assisted living after that. Couldn't figure out the correlation.

I'm not sure how a lender reports it since technically the balance would be increasing due to interest. If that was the case, it would most likely lower your score because the installment balance would be higher than the high credit.

If the lender does not report the interest then it would only affect the score based on the new loan. I am not even sure if they're actually reported to the credit bureaus since they don't have a payment, there would be nothing to really report.

[Revelate]

Depending how it reports would affect FICO scoring.

That said there were some conflicting reports though I suspect the poster suggesting they don't report is correct:

http://ficoforums.myfico.com/t5/Mortgage-Loans/Reverse-mortgage/td-p/575759

[driftless]

Thanks for the link.