How much money will you get from a reverse mortgage? If you are over 62 years old and living in your primary residence, you may be qualified to apply for a Home Equity Conversion Mortgage. If you have weighed in the pros and cons of a reverse mortgage and have decided that this is for you, and you are wondering how much you will be getting, then read on.
So, how much money do you get from a reverse mortgage? It depends on several factors.
- How much home equity do you have available? Everything depends on the amount that is available on your home equity. To give you an idea, you need to know how much your home’s equity is basing it on the current appraised value. Normally, the ceiling that you can use is 80% of your home equity.
- How old is the youngest borrower? For HECM, they will base the amount you can borrow with the age of the youngest borrower. As of January 1, 2020, the maximum amount that the FHA has set is $765,600. But again, there are a lot of factors that will have to be considered before you can get the maximum amount. So be prepared to receive less than the maximum amount mentioned. When it comes to the age factor, the tendency is that the younger the borrower is, the higher the loan proceeds will be.
- How you choose to get paid will matter as well. Are you going to receive your payment monthly or in one lump sum payment? It may seem that it doesn’t matter, but it does. Getting paid in one lump may seem a big amount, but you may end up losing some amount in the long run. Unless you need a big amount for a special need, then go for it. But if you are looking for a steady income, it would be better. Plus, if the economy holds, your home’s value might go up in time.
For you to know if your decision to apply for a reverse mortgage is worth it, a mortgage calculator will be a good help. Better yet, you can contact us for more details.