Remortgage Getting Paid

Of course, what you’re really interested in is the money. This is one time in your life when it’s perfectly okay to be focused on material things. After all, that’s what a reverse mortgage is all about — lending you the money you need to buy the things you want. This is also the easiest part of getting a reverse mortgage: The lender determines how much you can borrow and you simply pick your payment option and start receiving money. No sweat. Still, there are some things you need to know about payments, your current financial issues, and the country’s financial issues before you make a decision.
Figuring out how much you can get

Without sitting down with an originator, there’s no way to tell you for sure what you can borrow from a reverse mortgage. We wish we could give you a simple formula, but there just isn’t one.

Your age: Generally, the older you are, the better off your loan situations because the lender figures it won’t have to work on your loan as long as if you were a spring chicken.

Your home value: More equity equals more money available to borrow.

Your area: Higher home values in the area means higher loan values for you if you choose an HECM or Home Keeper (which both use county medians to determine your loan principal).

Interest rates: This is the one factor where less is more — the lower the interest rates, the higher the principal.

If you can wait a few years to get your loan, it will be worth it in the increased principal. Most people who wait at least five years are pleasantly surprised to find their loan amount has gone up . . . to the tune of a few thousand dollars. Don’t wait so long that you can’t enjoy the cash flow — that trip down the canals of Venice will probably be a lot more fun at 68 than at 98 — but don’t rush out and get a loan on your 62nd birthday if you don’t really need it yet.

Also, each loan has its own system of determining loan value. For example, no matter what your home is worth, Fannie Mae’s Home Keeper bases the amount available to you on a scale as compared to the national lending limit ($359,650). On the other hand, the Cash Account has no set limit. It bases its principal solely on your age, home value, and interest rates.

You can get an estimate of what each loan may be able to offer you using online reverse mortgage calculators. The NRMLA calculator (find it at www.reversemortgage.org) is a good indicator because it breaks down the entire loan, from what your estimated costs are to how much you get per month. However, they don’t show you what you could get with a Cash Account, only HECM and Home Keeper. For a side-by-side comparison of all three loans, visit www. financialfreedom.com and take a spin on its reverse mortgage calculator.