How Much Can Be Borrowed?

How much can I get with a reverse mortgage, and what are my payment options if I live in Forest Grove Oregon?

Answer:

This would depend on the type of home loan, the lending company you choose, as well as the payment option you choose.

Most reverse mortgages today are Home Equity Conversion Mortgages (HECMs). The Federal Housing Administration (FHA), a part of the Department of Housing and Urban Development (HUD), insures HECMs. With a HECM reverse mortgage, you could get your money in one of three ways: as a credit line, in monthly installments, or a one time payment. You can also get a combination of monthly payments and a credit line.

Note: This webpage has information about HECMs, which are the most common type of reverse mortgage.

To obtain a HECM reverse mortgage your Forest Grove mortgage provider will calculate exactly how much you will be approved to borrow overall depending on your age, the interest rate, along with the lesser of the appraised value of your house or the maximum claim amount. This number is called your initial principal limit. For those who are borrowing with someone else or have a non-borrowing spouse, the principal limit is based on the age of the youngest co-borrower or eligible non-borrowing spouse.

Generally, you could get as much as 60 percent of your principal limit in the 1st year. But, if the amount you owe on an existing mortgage (and other required payments) is greater than 60 % of your principal limit, you are able to take out enough to pay back your mortgage (and any other required payments, including initial loan charges) plus additional funds of up to 10 % of your principal limit. We refer to these amounts as the first year draw limit.