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How Much Can You Borrow
Reverse Mortgage Loan Limit $625,500
The size of reverse mortgage loans is determined by the borrower's
age, the interest rate, and the home's value.
There are also
no restrictions on the value of the homes qualifying for a HUD reverse
mortgage.
The older a borrower, the larger the percentage of the home's value
that can be borrowed.
How do I receive my money?
You have 4 options:
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Lump Sum |
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Monthly Payments
(your choice of loan advances for a
specific period, or for as long as you live in your home)
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Line of
Credit (unscheduled payments or in installments, at times and in amounts
of borrower's choosing until the line of credit is exhausted)
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Any combination you would
like of the above three choices
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When do I repay the loan?
Reverse mortgages are designed to eliminate the burden of making monthly
mortgage payments. The loan will not be due until you no longer occupy
your home as your principal residence. At that time, the money you have
borrowed plus the interest and fees will be due and payable. Generally,
borrowers or their estate repay the loan by selling the home. If the
home is sold, you or your estate may keep the proceeds in excess of the
amount due the lender.
No More Monthly Mortgage Payments.
Unlike ordinary home equity loans, a HUD reverse
mortgage does not require repayment as long as the borrower lives in the
home. Lenders recover their principal, plus interest, when the home is
sold or refinanced by the heirs. The remaining value of the home goes to the homeowner or to his or
her survivors. If the sales proceeds are insufficient to pay the amount
owed, you or your estate would not be responsible for paying the
difference. This is Guaranteed by the Federal Government.
There are No Income or Credit Requirements.
FHA's mortgage insurance guarantees to the borrowers
that they will continue to receive their loan proceeds even if the
Lender goes bankrupt. The FHA insurance also guarantees Lenders that
they will get their money back with interest and fees even if the
homeowners owe more than the value of the property. Thus, while the FHA mortgage insurance increases the initial
cost of getting a HECM reverse mortgage, it also allows the Lenders to
sell HECM Reverse Mortgages at interest rates well below those of FannieMae
and private lenders.
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