How much can I borrow with a Home Equity Conversion Mortgage (HECM) or proprietary reverse mortgage?

How much you can borrow with a HECM or proprietary reverse mortgage depends on several factors:

• Your age
• The type of reverse mortgage you select
• The appraised value of your home
• Current interest rates, and
• A financial assessment of your willingness and ability to pay property taxes and homeowner’s insurance

What is a reverse mortgage?

Reverse mortgage loans allow homeowners aged 62 or older (both borrowers must be 62 or older in Texas) to convert their home's value into cash or monthly payments without selling or moving. These loans, insured by the FHA Mortgage Insurance program (Reverse Mortgage Authority, LLC and its DBAs do not act on behalf of or at the direction of HUD/FHA or the federal government), are facilitated by the Department of Housing and Urban Development (HUD). Homeowners can borrow against their home's equity or purchase a new home based on the new property's value or purchase price.

Here’s how a reverse mortgage works:

• Payment Options: Qualifying homeowners can receive generally tax-free payments from reverse mortgage lenders monthly, as a lump sum, or as a line of credit. It is recommended to consult a tax adviser.
• Verification: Income, assets, and liabilities will be verified.
• No Repayments Required: No repayments are necessary as long as at least one borrower lives in the home, and taxes, insurance, and HOA dues are paid on time, and the home is maintained in good condition.
• Social Security and Medicare: These benefits are not affected by a reverse mortgage.
• Loan Recovery: Lenders recover the loan amount, plus accrued interest and mortgage insurance when the last homeowner passes away, chooses to sell the home, or a family member chooses to purchase the home. Once the loan is paid in full, any remaining equity will be distributed to your heirs. Compliance with the terms of the mortgage is necessary.