Riverside Reverse Mortgage Question - How much can I borrow with a reverse mortgage?
Whenever my mom talks to her friends about me, inevitably they get around to what I do for a living and the reverse mortgage questions come flying at her. One that she hears all the time is, "What is the loan to value on a reverse mortgage?" or "How much can you get on one of those reverse mortgage loans?"
The amount of money that a borower can obtain on a FHA Reverse Mortgage is based upon three “factors”.
- The appraised value of the home up to the FHA Lending Limit.
- The age of the youngest borrower.
- The expected Interest rate.
They work like this:
- The higher the home value, the more you can borrow.
- The lower the interest rate, the more you can borrow.
- The older you are, the more you can borrow.
All three of these factors have their own rules and quirks.
- If your home is worth more that the FHA Lending Limit your loan amount will be based upon the lending limit.
- If the expected rate is below 5.06% then you have reached the “floor” and the loan amount is already maxed out for that factor.
- Once you reach the age of 90 you qualify for the maximum amount based upon the “age” factor.
Take a look at the HUD Principal Limit Factors based upon age, rate and loan type (Saver and Standard) to see the factors and the effect they have on LTV.
By Deborah Nance
Your Local Southern California Reverse Mortgage Professional
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iReverse Home Loans, LLC, NMLS#810502 originates reverse mortgages in Alabama, Alaska, Arizona (MB-0919584), California, Colorado, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, Ohio, Oregon (ML-5378), Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont (1164-MB), Virginia, Washington and Wisconsin.
Important Information: Reverse Mortgages are neither "endorsed" nor "approved" by the Federal Government. The FHA (Federal Housing Administration) provides certain insurance benefits for lenders and borrowers in connection with the lender’s HECM loans; the FHA does not make or originate loans. The owner(s) retain title to the property that is the subject of the reverse mortgage until the person sells or transfers the property and is therefore responsible for paying property taxes, insurance, maintenance and related taxes. Failing to pay these amounts or failure to maintain the condition of your property may cause the reverse mortgage loan to become due immediately. A reverse mortgage is a complex loan secured by your home. Whether such mortgage makes sense for you depends on your financial situation and needs. For these reasons, we strongly recommend that you consult with a qualified independent housing counselor, family members and other trusted advisers before making this decision. This website is not from HUD or FHA and was not approved by HUD or any government agency.