Factors Affecting Reverse Mortgage Payout

How Reverse Mortgage Payouts Are Determined

The first thing to note when determining reverse mortgage loan amount, is that a reverse mortgage does not have a set value-to-loan ratio. That means the home equity you have built up in your home is not the sole deciding factor in the amount you are eventually loaned. Some of additional factors considered in the process include:

Borrower Age

You must be at least 62 years old to qualify for a reverse mortgage loan. Since the loan is based on the amount of time you have it before it is paid off, the older you are the more you can borrow since you will most likely pay it off sooner.

Home Value

Your home equity is one of the biggest factors in determining how much you can receive from a reverse mortgage. These HECM loans are designed to give you access to the equity you have built up in your home and this is largely determined by the resale value of your home. Reverse mortgage calculators can help you estimate this value.

Interest Rates

Current interest rates at the time of your loan also affect how much money you can receive. You do not make monthly payments with a reverse mortgage so the interest is factored into how much money is made available to you based on the equity in your home.

Your Personal Financial Situation

If you have liens or mortgage balances left to pay, these must be paid in full by your reverse mortgage so less of that amount will be available to you as cash. This is important as it can reduce the total amount you take away from an HECM loan.

Contact Us Today to Learn More About Other Reverse Mortgage Limitations

Accessing your home equity with an HECM reverse mortgage loan can be a smart choice for many people. As long as you know the exact factors affecting your payout, you can make a sound financial decision. However, there is no perfect formula to calculate the cash available from your loan without speaking to a qualified lender. The information above should be used as a starting point. From there, contact Citizens Lending Group in California to learn more about reverse mortgage requirements and how much you can expect to receive from your home.