How Much Money Can I Get From a Reverse Mortgage?
There is no single percentage that applies to everyone. The amount you may be able to access depends on factors such as your age, the appraised value of the property, the location and type of home, the lender's guidelines and any mortgage or other secured debt already registered against the property.
← Back to Reverse Mortgage QuestionsThe Amount Is Based on the Property and the Borrower — Not One Fixed Formula.
Reverse mortgage lenders assess the file using their own lending guidelines. In general, age, property value and the existing debt against the home are among the most important factors in determining how much may be available.
Age of the Homeowner
The age of the borrower — or borrowers — is an important factor in determining how much the lender may be prepared to advance.
Appraised Property Value
A current appraisal is generally required because the lender needs to establish the value of the home being used as security.
Property Location
The location of the home can affect the lender's assessment and the amount that may be available.
Property Type
The type and marketability of the property can also affect the lender's decision.
Existing Mortgage Debt
Any mortgage or other secured debt that must be paid out reduces the amount of cash that is ultimately available to the homeowner.
Lender Guidelines
Different reverse mortgage lenders may use different limits and qualification rules, so the available amount can vary from one lender to another.
The Approved Amount and the Money You Actually Receive Can Be Different.
If there is already a mortgage or other secured debt against the property, the reverse mortgage proceeds may first have to be used to pay out those amounts.
That means the total amount approved by the lender may be higher than the actual cash remaining after the existing mortgage and required closing costs have been dealt with.
The current mortgage may need to be paid out from the reverse mortgage proceeds.
Other amounts registered against the property may also affect the net proceeds available.
Applicable legal, appraisal and transaction costs can reduce the final amount received.
The important number is what remains after all required payouts and costs are deducted.
We Need the Property Value and the Current Debt Picture.
The most useful way to estimate what may be available is to review the homeowner's age, the property, the current mortgage and any other debt secured against the home.
Borrower Age
We need the age of each homeowner who will be part of the reverse mortgage application.
Current Property Value
A current appraisal is generally required before the lender can confirm the final amount available.
Existing Mortgage Balance
We need to know the current amount owing on any mortgage that may have to be paid out.
Other Registered Debt
Second mortgages, liens or other secured obligations can affect the net proceeds and lender structure.
Property Details
The home's location, type and marketability form part of the lender's assessment.
Lender Comparison
Because lender guidelines differ, comparing available reverse mortgage options can materially affect the amount available.
The Right Question Is How Much Will Actually Be Available to You.
The amount you can access through a reverse mortgage depends on the borrower, the home and the existing debt against the property. The most useful number is the net amount remaining after any required payouts and closing costs are taken into account.
Let's Talk →