How much can I borrow with a reverse mortgage?
That’s perhaps one of the first questions potential borrowers will ask when they are first considering a reverse mortgage loan. There are three main factors that determine the borrowing limit, also called the principal limit, from the FHA-insured Home Equity Conversion Mortgage (HECM) loan.
1. The Borrower’s Age
More specifically, the age of the youngest borrower who will be on the loan can have a significant impact on the amount of money you can receive. Because HUD expects to pay more over the life of a loan for younger borrowers, the principal amount may be less.
2. The Value of the Borrower’s Home
The current appraised market value of your home is also used to determine the principal limit of a reverse mortgage. In the case of the HECM program (Home Equity Conversion Mortgage), the FHA loan limit will be taken into consideration. This will come into play on homes that exceed this limit. The maximum HECM reverse mortgage limit you can borrow against is $726,525 (Updated January 1st, 2019), even if your home is appraised at a higher value than that.
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3. Current Interest Rates
The current interest rates will also determine how much a borrower can receive. The lower the interest rate, the higher the more funds are available.
If you are curious to see how much you could potentially borrow with a HECM reverse mortgage loan, try Alpha Reverse Mortgage’s online calculator to get an estimate. Or contact one of our Certified Reverse Mortgage Professionals for more assistance.
Learn more about how people are using home equity conversion mortgages for purchasing homes:
Please keep in mind that the reverse mortgage industry in constantly changing and some of the information contained on this site may not be current. Please ask a licensed reverse mortgage professional for up-to-date guidelines.