Reverse Mortgages–Part 2

How much can I borrow?

What can be borrowed is not a set amount, it is a formula that takes the following into consideration.

1. The age of the borrower.

The older the borrower, the more that can be borrowed.

2. Current Interest Rates

The lower the interest rate, the more that can be borrowed.

3. The equity in the home.

The greater the value of the home, the more that can be borrowed.

4. The location (county) of the home

AARP has a very effective calculator that can help you determine how much money you might be able to take out of your home.

http://rmc.ibisreverse.com/rmc_pages/rmc_aarp/aarp_index.aspx

How is the Reverse Mortgage paid off?

Typically, the reverse mortgage is paid off by the borrower's estate.

The reverse mortgage can also be paid off from the proceeds of the sale of the house if the house is sold before the borrower is deceased.

What if I owe money on my home?

If you do not own your home outright (if there is an existing mortgage) you must pay off that mortgage, however, it can be paid off with the proceeds of the Reverse Mortgage.

 

to be continued…