Riverside Reverse Mortgage Question

Riverside Reverse Mortgage Question - How much can I borrow with a reverse mortgage?

Whenever my mom talks to her friends about me, inevitably they get around to what I do for a living and the reverse mortgage questions come flying at her. One that she hears all the time is, "What is the loan to value on a reverse mortgage?" or "How much can you get on one of those reverse mortgage loans?"

The amount of money that a borower can obtain on a FHA Reverse Mortgage is based upon three “factors”.

• The appraised value of the home up to the FHA Lending Limit.
• The age of the youngest borrower.
• The expected Interest rate.

They work like this:

• The higher the home value, the more you can borrow.
• The lower the interest rate, the more you can borrow.
• The older you are, the more you can borrow.

All three of these factors have their own rules and quirks.

• If your home is worth more that the FHA Lending Limit your loan amount will be based upon the lending limit.
• If the expected rate is below 5.06% then you have reached the “floor” and the loan amount is already maxed out for that factor.
• Once you reach the age of 90 you qualify for the maximum amount based upon the “age” factor.

Take a look at the HUD Principal Limit Factors based upon age, rate and loan type (Saver and Standard) to see the factors and the effect they have on LTV.