Determine Home Value for Reverse Mortgage
Many seniors have discovered a solution to their financial difficulties by taking out a reverse mortgage, against your home's equity, but you do not have to make any payments until the home is sold. Once the home is sold, the lender will get back the principal you borrowed plus interest for the time that the loan lasted. This can help elderly homeowners through tight financial situations and long-term care issues.
Home Value Factors
To determine the amount of money you can borrow from a reverse mortgage there are many factors to consider, including:
- The value of the home. The home will be appraised to determine the market value of your property and you will be able to borrow up to 80% of the equity in your home depending on the other factors.
- Your age at the time you apply for the reverse mortgage. The older you are, the more money you can take out of the equity in your home.
- The total amount of cash you can obtain will depend on the amount of loan closing costs, mortgage insurance rates, and interest rates.
- For HUD reverse mortgages there is a maximum limit you can borrow which depends on where in the country you live. If the cost of living is higher in the area you live in you may have a higher limit than someone who lives in a rural area with a lower cost of living. Once you contact a lender and HUD they will get the information they need in order to determine what your maximum lending limit is.
Contact HUD before you decide to take out a reverse mortgage on your home. They will be able to explain all of the facts about reverse mortgages and they will provide you with a approved housing counselor, who can help you through the process.
Find more information about reverse mortgages online from the Department of Housing.