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.