How Much Money Funds Can I Get Reverse Mortgage Loan

Factors that influence how much you are able to borrow from the HECM program.

  • Age (or the age of the youngest spouse in the case of couples).
  • Appraisal value of home by an FHA appraiser. Not Zillow¬†values or what you believe the home is worth.
  • Current market interest rates.
  • Lending limit in your area (in some cases).
  • Your financial assessment – credit and income are now factors for this loan.

You have to be 62 years of age or older.

The home must be your primary home.

There has to be sufficient equity to qualify, enough equity to pay off any outstanding debts like mortgages or liens.

The older you are, the more equity you have in your home, the better your financial assessment the more funds will be available to you.

There are many ways that a reverse mortgage can benefit your retirement and most media do not cover these pros. One way is to set up a LOC (line of credit) and this line of credit will grow over time (so the reverse mortgage will grow your retirement income). No other program has that feature by leveraging the homes equity.

Questions to ask yourself before committing to a reverse mortgage.

  1. Do you plan on living in this home for your entire retirement?
  2. What do I need this money for?
  3. Is it worth paying the fees to access my home equity?
  4. Can you take these proceeds to eliminate a mortgage payment and or debt? How will this new financial freedom impact your retirement?
  5. How about your kids/heirs? Are they behind your decision to get a reverse mortgage.
  6. How are property prices in my area and what are my expectations of the future? Could the increase in equity in the future help me offset the borrowing costs today?
  7. Factor in future repairs, cost of property taxes and insurance. The biggest fear for most seniors is running out of money and the HECM program was designed to help seniors.

Ultimately the decision should be based on your retirement goals. Sit down with your family and financial advisers to discuss your options. For many getting a reverse mortgage means eliminating the mortgage payment they currently have. It’s not only money that matters, but the ability to reduce stress, or have a better retirement should be non quantitative factors you think about.