The amount of money you can receive from a reverse mortgage generally ranges from 40 to 60% of the appraised value of your home. The higher you are, the more you can receive, since loan amounts are mainly based on your life expectancy and current interest rates. Monthly payments generally allow you to borrow more money because they cost less. You'll receive the money for a longer period than you would with the lump sum payment option, so instead of paying interest and fees on the total amount right from the start, you'll only pay interest and fees on the amount you've received so far.
With a capital of 100%, you may be able to qualify for a one-time payment of nearly 50% of the value of the home. However, with a capital of 75%, that global payment may be closer to 25% of the value of your home. HECM borrowers must be 62 years of age or older and must participate in a HECM counseling session approved by the HUD before applying for a reverse mortgage. If you're looking for a HECM, schedule an appointment to contact a trained reverse mortgage advisor to discuss your options and prepare for the responsibilities associated with this unique loan product.
Only you can tell if the costs of applying for a reverse mortgage are worth it and decide how you want the amount to be paid. If you or someone you know is the victim of an inverted mortgage scam, file a complaint with the FBI, file an online complaint with the HUD-OIG, or call their hotline at 1-800-347-3735.One of the most important factors affecting the amount you can get from a reverse mortgage is the value of your home. While you may qualify for a reverse mortgage with as little as 50% of your home equity, the amount of your potential payment increases along with your principal. In addition to the principal and interest on your reverse mortgage, you will be responsible for paying other fees.
You can use LendingTree's inverted mortgage calculator to estimate the amount of a lump sum you're likely to qualify for; for other types of payments, which require more complex calculations, you should contact a lender or housing counselor. But exactly how much equity do you need to have in your home to qualify for a reverse mortgage? How does a reverse mortgage compare to your other loan options? Here's what you need to know. The heirs must decide whether to pay off the reverse mortgage out of pocket (or with another loan) and keep the property or sell the house and use the proceeds from the sale to pay the balance. You can use a line of credit growth feature that allows you to borrow money now and leave some credit available for the future.
It's a good idea to search for a reverse mortgage calculator online and enter some numbers to see if the benefits outweigh the drawbacks. Reverse mortgages only expire when the borrower dies, lives outside the home for more than 12 months (unless a co-borrower or eligible spouse lives on the property), sells the property, or stops paying taxes and property insurance. The inverted mortgage lender charges the opening fee to cover the cost of processing your loan application. Because you're not paying the balance of your reverse mortgage, you'll make less profit when you sell, or you'll limit your borrowing power if you need a new loan.