Frequently Asked Questions About Reverse Mortgage
How Much Cash Can I Get From My House?
Several factors control how much you can borrow. These are the value of the home, the type of loan you select, and the current interest rate. The age of the youngest homeowner is also a factor for reverse mortgages. To find out how much money you may be able to get from a reverse mortgage, use one of these simple, on¬line calculators:
Golden Years Reverse Mortgage, Inc www.goldenyearsrm.com
National Reverse Mortgage Lenders Association calculator
www.governmentreversemortgage.com
The condition of the home and property values in your area may also determine how much cash you will have to pay for help at home. If you’ve lived in your house for many years, it will have aged considerably. The house needs to be in good repair to qualify for a reverse mortgage.
Property values may increase over time. A home that appreciates by 2% each year will increase in value from $150,000 to over $165,000 in five years. If you can continue to live at home safely, it can be worthwhile to use some of your growing equity.
How long will the reverse mortgage last?
Reverse mortgages make the most sense for you if want to stay in your current home for many years. If you have an ongoing health condition, it is important to understand how much money the loan will give you to pay for help over time.
Let’s consider the situation of three families who take out a reverse mortgage. They live in a house that is in good repair and worth $150,000. They own their homes free and clear of any debt.
Scenario #1: Joe and Liz Anderson (ages 69 and 65) built their 2¬story dream home after retiring four years ago. Since then, Joe had a mild heart attack and has difficulty climbing the stairs. Based on Liz’s age, the Andersons receive about $84,000 from their reverse mortgage. They take $20,000 of the loan to install a lift and make other home modifications. They keep the rest ($64,000) in a line of credit for future needs.
Scenario #2: Melba Jones (age 75) has lived in the same town all her life. She knows she can rely on family and friends for help with her arthritis. Her big concern is using up all her retirement funds. She receives about $97,000 from the reverse mortgage and selects a tenure payment plan. This gives her $623 per month for as long as she stays in her house. This gives her peace of mind, knowing that she can pay for extra expenses and won’t be a burden to her children.
Scenario #3: Bill Smith (age 85) recently had a massive stroke. He condition is serious, and he could go to the nursing home. But his family is committed to keeping him at home. At his age, Bill can receive over $111,000 from a reverse mortgage. This money will be enough for his family to withdraw $4,800 each month for up to two years from the line of credit.
Interest rates change frequently, so only a mortgage lender can tell you how much you may get from a reverse mortgage.
