The HUD guidelines for initial lump sum disbursement allow for all mandatory obligations (closing costs + any outstanding debt owed that is secured against the property) + an additional 10% cash out to the borrower or 60% of the Principal limit (whichever is greater). To determine how much is available for your specific circumstances, you need to consult with a lender for them to run those scenarios for you through their calculator.
Subsequently, the longer the duration of the payment plan chosen, the lesser the amount will be.
The older you are, the higher the monthly payment amounts will be. If you opt for a term payment of 15 years, once the 180th payment is disbursed, no more funds will be available. If you elect for a Tenure payment, the payments will continue to come no matter how long you live in the property if you live in your home and the loan is in good standing. For example, you can take a payment plan called a Tenure, which is a guaranteed payment for life, or you can opt for a payment plan over a specified Term. Essentially, the formula considers how much money is available from the loan, the age and life expectancy of the youngest borrower, the current expected interest rate, and the duration of the payment plan chosen. The calculation for a monthly payment plan option is quite the mathematical formula. Close to a birthday? If you are within 6 months of your next birthday, the calculator uses the principal limit factor for the higher age of your upcoming birthday, giving you more money with your loan.Let us know if you used the loan to take cash out of the property less than 1 year ago.Have a home equity line of credit (HELOC)? Include this balance in the mortgage payoff.Be sure you include all mortgage balances for precise net proceeds.It determines the loan amount of the reverse mortgage. Remember: The younger spouse’s age is crucial.Always put your spouse’s age in the calculator, even when below 62, unless that spouse does not, has never, and will not live in the home.Take the time to thoroughly review your options and consider which one is most appropriate for your unique situation. It is important to remember that the loan officer’s role is not to “sell” you on any particular program or option but to provide you with the information you need to decide which option is best for you. Your loan officer can help you understand the pros and cons of each option and answer any questions you may have.
It is important to carefully review these options and consider which best suits your needs. If your next birthday is within six months of finalizing your loan, this will warrant a higher loan amount.ĪRLO™ provides a range of options for borrowers to choose from. The borrower’s age influences the loan amount for a reverse mortgage. By providing this, you’re ensuring the utmost accuracy in the results. But here’s the rationale: The core calculation of your reverse mortgage potential hinges on the age of the youngest borrower. Sharing personal details, especially age, can be delicate for many.
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