Klamath Falls Reverse Mortgage Question - How Much Can I Borrow? I’m 66.
For an personal estimate on reverse mortgage proceeds, contact a reverse mortgage consultant or a HUD Approved HECM Counselor. But - based upon rates available today, 2/1/2011 here is a sample scenario that might help to answer your question.
John and Jane Doe are both 66 years old and live in a home valued at $220,000.00. FHA Reverse Mortgages are availabe for principal residences only. They have a mortgage on their home with a current balance of $120,000.00 and 18 years left to pay. Their monthly principal and interest payments are $796.00 per month. A Reverse Mortgage uses 3 factors when determining the amount of funds available to borrowers.
These factors are used to determine the Principal Limit, and from that Principal Limit, closing costs and any required payoffs are deducted. Here is the example of what these imaginary borrowers could obtain.
$220,000.00 Home Value
$141,200.00 Principal Limit *
-$ 4,400.00 Subtract Upfront MIP (FHA Mortgage Insurance Premium)
-$ 3,300.00 Subtract Closing Costs (settlement, recording, appraisal, title insurance, etc.)**
-$120,000.00 Payoff current home loan. (Bye, bye house payment!) ***
$ 13,500.00 Loan proceeds to homeowner.
In this scenario, our homeowners are interested in the fixed rate reverse mortgage, because at the current expected rate on the adjustable reverse, they would not qualify for enough funds to payoff their mortgage and they do not wish to bring money to the table.
Be sure to consult with a qualified reverse mortgage consultant when checking out reverse mortgages for yourself or a loved one. There are also some great websites that I recommend you research, like FHA;s HECM Page, National Reverse Mortgage Lenders Association (NRMLA) and the National Council on Aging - check them out.
*Remember, this changes based upon age & expected rate so this number will be different based upon different expected rates. I am using a major lenders current published rates for a HECM Standard Fixed Rate Loan.
** Currently, many lenders have waived origination fees and service fees. So I am not including them on this scenario.
***Homeowners are responsible to keep taxes current, home insured and maintained.
For an personal estimate on reverse mortgage proceeds, contact a reverse mortgage consultant or a HUD Approved HECM Counselor. But - based upon rates available today, 2/1/2011 here is a sample scenario that might help to answer your question.
John and Jane Doe are both 66 years old and live in a home valued at $220,000.00. FHA Reverse Mortgages are availabe for principal residences only. They have a mortgage on their home with a current balance of $120,000.00 and 18 years left to pay. Their monthly principal and interest payments are $796.00 per month. A Reverse Mortgage uses 3 factors when determining the amount of funds available to borrowers.
- Age of the youngest borrower.
- Current Expected Rate.
- Appraised Home Value or Lending Limit, whichever is less.
These factors are used to determine the Principal Limit, and from that Principal Limit, closing costs and any required payoffs are deducted. Here is the example of what these imaginary borrowers could obtain.
$220,000.00 Home Value
$141,200.00 Principal Limit *
-$ 4,400.00 Subtract Upfront MIP (FHA Mortgage Insurance Premium)
-$ 3,300.00 Subtract Closing Costs (settlement, recording, appraisal, title insurance, etc.)**
-$120,000.00 Payoff current home loan. (Bye, bye house payment!) ***
$ 13,500.00 Loan proceeds to homeowner.
In this scenario, our homeowners are interested in the fixed rate reverse mortgage, because at the current expected rate on the adjustable reverse, they would not qualify for enough funds to payoff their mortgage and they do not wish to bring money to the table.
Be sure to consult with a qualified reverse mortgage consultant when checking out reverse mortgages for yourself or a loved one. There are also some great websites that I recommend you research, like FHA;s HECM Page, National Reverse Mortgage Lenders Association (NRMLA) and the National Council on Aging - check them out.
*Remember, this changes based upon age & expected rate so this number will be different based upon different expected rates. I am using a major lenders current published rates for a HECM Standard Fixed Rate Loan.
** Currently, many lenders have waived origination fees and service fees. So I am not including them on this scenario.
***Homeowners are responsible to keep taxes current, home insured and maintained.
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