age restrictions on reverse mortgages
The total pool of money that a borrower can receive from a HECM reverse mortgage is called the principal limit (PL), which is calculated based on the maximum claim amount (MCA), the age of the youngest borrower, the expected interest rate (EIR), and a table to PL factors published by HUD. A reverse mortgage or home equity conversion mortgage (HECM) is a type of home loan for older homeowners (62 years or older) that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner’s insurance. Reverse mortgage rate calculations are then made to determine how much money you qualify for. The formula for determining the amount of mortgage is dependent on: 1  The borrower’s age, 2  The calculated market value of the home, 3  Current interest rates, and.  The maximum loan amount in the borrower’s county. For the same equity amount, you can qualify for $149,000 if you are age 76. Use our loan calculator to see around how much you can get. The loan amount is derived from the mortgage limit of the Federal Housing Administration (FHA) in the area. A: The amount of funds you are eligible to receive depends on your age (or the age of the youngest spouse when there is a couple), appraised home value, interest rates, and in the case of the government program, the FHA lending limit, which is currently $625,500. When you meet the eligibility requirements, you can apply for a loan with a reverse mortgage lender at current rates. Reverse mortgage rate calculations are then made to determine how much money you qualify for. The formula for determining the amount of mortgage is dependent on: The borrower’s age, Formula for Reverse Mortgage Rate Calculations. So far the most popular reverse mortgage program you can find is the Home Equity Conversion Mortgages (HECM) program. Not all homeowners can qualify for this program, only those that are at least 62 years of age can. To qualify for the HECM reverse mortgage in the United States, borrowers generally must be at least 62 years of age and the home must be their primary residence (second homes and investment properties do not qualify). The expected interest rate, or EIR, is used mainly for calculation purposes to determine how much a reverse mortgage borrower qualifies for based on the value of the home (up to the maximum lending limit of $625,500) and age of the youngest borrower. The EIR is often different from the actual note rate, or IIR. You can pay off the existing mortgage with a reverse mortgage, money from your savings, or assistance from a family member or friend. For example, let's say you owe $100,000 on an existing mortgage. Based on your age, home value, and interest rates, you qualify for $125,000 under the reverse mortgage program. Under this scenario, you will be able to pay off ALL the existing mortgage and still have $25,000 left over to use as you wish.
at least 62 years of age