Reverse Mortgage News

How Much Can I Get from a Reverse Mortgage?

Reverse Mortgages can be a great retirement tool, but have you ever wondered how much you can actually get from a Reverse Mortgage? We have answered this question for you here.

Curious how much you can get through a reverse mortgage by borrowing against your home equity? This is probably one of the most common questions seniors
have about getting a HECM or reverse mortgage in Colorado.

As you probably know, a Home Equity Conversion Mortgage (HECM) reverse mortgage works very differently than a standard mortgage. Rather than borrowing
money to buy a house, you’re releasing the equity you’ve already built up in your home*. Unlike a traditional mortgage, the balance on a reverse mortgage
also increases over time, which is one factor that limits how much you can borrow.

In general, the amount you can get will be larger the older you are, the more your home is worth, and the lower the interest rate on the loan. There
are a few other things you should know, too. Here’s a general overview that explains how much you can get, but remember you will need to work with
a reverse mortgage specialist for an accurate estimate of your maximum loan amount.

So How Much Can You Get with a Reverse Mortgage?

The amount of money you can access with a HECM loan depends on:

Your age. You will need to be at least 62 to qualify. Generally speaking, the older you are when you take out the loan, the more money you can access.
As a general idea with a 5% interest rate, a 65-year-old may be able to 52% of the home’s equity whereas a 71-year-old may be able to borrow up
to approximately 60% of the equity.
Your home’s value. The current appraised market value of your home will also determine maximum loan proceeds. The more equity you have, the greater
the potential loan amount.
The interest rate. The lower the interest rate you get, the more money you can access. There is a floor on the rate used to calculate the amount available,
so anything below that rate is calculated at the floor rate.
Existing mortgages and/or liens . Any existing mortgage balance or other liens against the property must be paid off from the loan proceeds first before
you access any money. Of course by paying off these loans, you will eliminate the monthly payment saving yourself money every month.
Type of distribution. How you choose to receive the loan will impact your ultimate loan amount. The lump sum option is typically the least preferred
method of taking the funds while a line of credit offers the most money available to you over the long run due to the growth rate available with
this option.

Cap on Withdrawals During the First Year

Since 2013, HECMs have a limit on the amount you can take out during the first 12 months of your loan. First, the Department of Housing and Urban Development
(HUD) determines how much you can borrow overall. As discussed earlier, this number, called your initial principal limit, is based on your age, home
value, and interest rate. You can usually take out up to 60% of the initial principal limit during the first 12 months.

If you have an existing home loan or other necessary payments that exceed 60% of the limit, you are allowed to take out enough to pay off these debts
(including any upfront fees) plus cash up to 10% of your initial principal limit. The rest of the money that you qualify for will be available 12 months
after the loan closes.Limits on Reverse Mortgage Loans

How Do You Want to Receive the Money?

Another important factor to consider is how you want to receive the loan proceeds. If you choose a monthly payout or adjustable-rate line of credit, you
can access the remaining funds (beyond the 60% limit) after the first 12 months. If you choose a fixed-rate, lump sum loan, you can only access the
amount allowed under the first-year limits and any remaining loan amount will be forfeited!

How Much Equity Do You Have?

You can still qualify for a reverse mortgage even if you have an existing home loan. Fortunately, getting a reverse mortgage in Colorado is easier than
it was a few years ago thanks to rebounding home prices. If you have at least 50% or more equity in your home, are over age 62 and have adequate income,
you should qualify for a reverse mortgage. The lower your existing mortgage balance, the more proceeds you can access from the loan.

A reverse mortgage specialist can give you a personalized estimate of how much you can get from a reverse mortgage. Give me a call to find out how much you can receive from a reverse mortgage and learn more about how these factors will affect you.

*Reverse mortgages are also available to purchase a home, but this is a topic for a different article.

Bruce Simmons

I absolutely love what I do - working with senior homeowners to help them live a more comfortable, flexible and secure retirement. I have the absolute best customers in the world, and even though I worked in the forward mortgage business for a number of years, I could never go back to doing conventional loans. I'm a 100% reverse mortgage specialist.

Five Reasons To Get A Reverse Mortgage When Rates Are High

Considering a reverse mortgage? Learn the five reasons why you should secure one now, even during high rates. Get reliable advice from our experienced team of professionals at Reverse Mortgage Colorado and make sure your financial future is secure.

John Addante

My wife and I are retired and had a mortgage that was quite high. We contacted Bruce regarding a Reverse Mortgage and were pleased with his knowledge and experience. He made the whole process very easy and explained everything along the way. Since then, I have had a couple of questions and contacted him regarding the RM. Bruce has always been very responsive and returned our calls within minutes. We couldn't be happier having used Bruce for the Reverse Mortgage and highly recommend him.

Kathryn Hostetler

Bruce has been serving my interest over and above what one might expect during the whole process of handling my reverse mortgage dating back to 2010 and continues to be available at present whenever a question may arise. He is one of the most reliable, trustworthy and knowledgeable experts regarding reverse mortgages that I have had the privilege to do business with! I would highly recommend Bruce to anyone who is considering a reverse mortgage. Thank you Bruce!

John Wickersham

I met Bruce from a referral who just love what he did for them on their Reverse Mortgage, So I contacted Bruce and told him my story and he came up with a great Reverse Mortgage for me and my needs and now I am living good and not worrying about Finances anymore. He had it done in a timely manner. If you are looking for the MAN to help you get the best Reverse Mortgage you need to call him and hope you let him help you.

Tim Mallory

Bruce is one of the most professional, knowledgeable and efficient experts I have worked ŵith ever in any field. He is fast to answer and always ready to help...and he's a great guy!

Kathleen Mitchell

I was hesitate about getting a reverse mortgage until Bruce Simons put my mind at rest. He is easy to work with, extremely knowledgeable and efficient. Things get done and he will make sure that you understand every part of the process. I interviewed several other people and he was hands down.....The only choice.

Mike Hoeffner

Doing a Reverse Mortgage is a major decision, when working with Bruce he came out personally to go over every thing in detail, there was no pressure to finalize the transaction, I had even put the loan on hold for awhile even though I had locked in my rate, I had called Bruce off and on for a few weeks to ask questions that I had concerns about and he was always available to talk to me. In the end it gave me time to feel comfortable about my decision to move forward with the Reverse. Bruce was very pleasant to work with and would certainly recommend Bruce if you are going to consider a Reverse Mortgage.

Jonathan Maiolatesi

Bruce Simmons at American Liberty is one of the best in the reverse mortgage industry. I have known and worked with him for years and he always does a great job. You are in good hands with Bruce and know that he will take good care of you or your loved ones every step of the way.

Ronda Giblin

Best thing I ever did! Bruce Simmons at American Liberty Mortgage is the best. He is always there to answer your questions, and can easily explain the whole idea of a Reverse Mortgage. He takes the time and goes through the entire process with you. It worked out so well for me. Thank You Bruce!

John Bell

We had researched Reverse Mortgages for 5 years and after hearing about Bruce Simmons and meeting with him, we finally decided to move forward with the Reverse Morgage. It has been over a year now and we are still very pleased with our decision. We think Bruce is very professional, knowledgeable and honest. Thank you, Bruce, for all your help.

Mary Bernard

I first met Bruce Simmons 2017. I found him on the internet. I was looking for someone local. I called him and explained I was only looking into doing a reverse mortgage, so I did not want him to think this was something I was ready to do. Bruce was friendly, very open about the basics of a reverse mortgage. Bruce came to my home and presented the figures and other details that he could offer. The first thing that impressed me was this was not a hard sell, more of a informational meeting. He was very open about all of the details, and answered my questions without hesitation. What really was evident was he was establishing a relationship with me, and I realized he knew I would not take the loan at that time. There was not enough equity in my home, and I would have to bring money to the table. Although I was not ready to do a loan, Bruce assured me he is always available for questions. Four years later, I finally did do a reverse mortgage, and I couldn't be happier with having done it. I have done away with a mortgage payment which allows me to fund my retirement account with that mortgage payment. We did some much needed landscaping with our cash out transaction, and will move on to improvements inside of the house. My reverse mortgage has a line of credit, and I feel sense security knowing it is there if I need it. Bruce explained that a reverse mortgage is not for everyone, but I feel certain that he paved the way for a strategy that worked for me. I will definitely do a refinance when the time is right. I will check in with Bruce to be sure what the benefits are when I do it again.

LESLIE HINES

I have worked with Bruce Simmons for 15 years. Bruce is one of the best in the industry. He is extremely knowledgeable, kinds and detailed in what he does. His clients love working with him and trust him to help them with their Reverse Mortgage loans. I would recommend Bruce to anyone I know that is thinking about or wanting to do a Reverse Mortgage. He will always take very good care of the customers and make sure their needs are met! Class act and one of the best in the industry by far!

How Much Can I Get from a Reverse Mortgage?