Reverse Mortgage Guide

(This is the first installment in a series of reverse mortgage educational postings by Sue Haviland, a Maryland-based reverse mortgage specialist. Please check back each Monday for more.)

With the rise in popularity of reverse mortgages, specifically HUD’s HECM (Home Equity Conversion Mortgage) it may seem surprising that there is still so much confusing information floating about. I am often asked just how the borrower’s age can make a difference in reverse mortgage proceeds. The question is posed like this: “So you’re saying as long as my husband and I are at least 62 years old and own a home, we can consider a reverse mortgage?”

It really can be that simple.

The minimum age is 62 for an FHA-insured HECM, the most popular reverse mortgage product. The exact age of the borrower(s) is one of the factors used to determine the available proceeds. The older the borrower(s), the higher the proceeds from a reverse mortgage, generally speaking.

To take this one step further, a borrower who is 78 years old will be eligible for a higher proportion of the home’s value than a borrower who is 64. And in cases where there is more than one borrower, the age of the youngest person is used.

The other pieces of the information needed include the home’s value (subject to FHA maximum lending limits as of this writing), and the current interest rates.

The best advice — as with any financial vehicle — is to consult with experienced reverse mortgage lenders in addition to family members or other trusted advisors to determine if a reverse mortgage is the right choice for you.
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Contributor Sue Haviland, based in Baltimore, MD has been a reverse mortgage specialist for more than five years.

Please post reverse mortgage questions in the comment box below. Thanks.

This entry was posted on Monday, January 14th, 2008 at 3:45 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.