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Reverse
Mortgage - Reverse
Mortgage FAQs - Payments
How Much Cash Can I Be Paid?
The amount a person can borrower depends on a number of factors including:
- The borrowers age
- Current interest rates
- The value of the property
- In the case of the HECM
program (Home Equity Conversion Mortgage), the
FHA loan limit will be taken into consideration. This
will come into play on homes that exceed this limit.
The FHA lending limit nationally as of February 24,
2009 is 150% X the Freddie Mac lending limit which
equals the FHA lending limit of $625,500. This
limit will only be good until the end of 2009.
Payout Options for Reverse Mortgages
The FHA HECM
program offers multiple payout options for borrowers while fixed rate reverse
products only allows for a lump sum payment. The HECM product is very popular,
in part, because of the flexibility that it offers to consumers. Below are some
payout options for the HECM program:
Tenure: Stable monthly payment for as long as a borrower lives in the
property as his/her primary residence.
Modified Tenure: Allows for a combination of scheduled monthly payments
and the ability to access funds from a line of credit.
Term: Consistent monthly payouts for a predetermined number of months.
Modified Term: Scheduled monthly payouts for a set number of months,
and the ability to access funds from a line of credit.
Line of Credit: Flexibility of being able to draw on an open line of
credit at will until equity is depleted. The amount of money that remains in
a line of credit grows each month by what is called a growth rate. The growth
rate works similar to earning interest on a CD. The difference is the growth
rate ads only to the amount you can draw (Borrow).
Other Popular Reverse Mortgage Questions:
What are
some basic qualification parameters?
How much cash can
I get and how do I get paid?
What happens to
my debt and what is the maximum I can owe?
Will there
be anything left for the borrower or their heirs once the property is sold or
the borrower no longer uses the home as their primary residence?
What are some of the
costs associated with reverse mortgages?
Will
receiving payments affect one's Social Security, Medicaid,
or Medicare benefits?
Who owns
the property, the lender or the borrower?
Is it possible
to refinance a reverse mortgage if a better opportunity becomes available?
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