Reverse Mortgage Limits
How Much Cash Can You Get From A Reverse Mortgage?
It's a good idea to find out about reverse mortgage limits before you decide to apply for one. In many cases, these limits are going to affect you in some way.
Often the reverse mortgage line of credit that you can get will depend on your home's value. You have to understand that there are both hard and soft limits to consider as well.
New Reverse Mortgage Limits Help More Seniors Stay in Their Homes!
Here is a closer look at these limits, the definition of hard and soft limits, and information on how you can use reverse mortgage calculation or a reverse mortgage formula to figure out how much you may be able to borrow.
First, as you are considering a reverse mortgage, you need to know what a hard limit is. Hard limits are those that the FHA sets. Currently the FHA insures about 90% of these reverse mortgages, so the limits that they have are definitely important to understand.
The limits from the FHA can vary. Usually the amount you can get is somewhere between $200,160 and at the upper end, $362,790. For more rural areas, the lower limits are going to apply, while the upper limit will be used in areas where the cost of living is a lot higher, such as in larger cities.
Of course, when it comes to these mortgage limits, they do change each year and they are raised a bit. However, to figure out how much you'll really be able to borrow, you also need to understand what soft limits are.
These limits are made to keep those who own high priced homes to be able to take out more of a loan than those that are in homes at the FHA limits. They also help to set the amount that you really are able to borrow.
Soft limits are the actual limits for the property you have because they determine the amount you're able to borrow. A reverse mortgage calculation is done based on the FHA limit or the appraised value of your home - whichever ends up being lower.
The actual amount that you will be able to borrow is going to depend on several factors that are taken into account in a reverse mortgage formula. Some of the factors include the interest rate at the time, your homes appraisal value, your age, the mortgage limits in the area you live in, and any other fees.
In most cases, the older you are, the lower the rates, and the more value you have in your home, the more money you'll be able to get with your reverse mortgage.
If you are only 65 years old and you go with a $100,000 loan at a 9% interest rate, you'll be able to take up to 22% of your home's value. However, if you are 75 years of age, you can take up to 41% of the value. You'll get even more if you are 85 years of age.
When you go with this type of a mortgage, you'll find that there are no mortgage limits based upon your income or assets. Even if you don't make a lot of money and you don't have good credit, you can still end up qualifying for these types of loans.
Before you decide to take out a reverse mortgage, find out about the reverse mortgage limits that apply to you. Once you know your limits, you can use reverse mortgage calculation to come up with a reasonable idea of the amount of money that you will be able to borrow.
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