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Mortgages

How much money can I get from my home with a reverse mortgage?

Generally, the amount you will be able to borrow will be larger the older you are, the more valuable your home is, and the lower the interest rate. To start, you can use a reverse mortgage calculator to get a general idea of how much you may be eligible to borrow. The National Council on Aging provides a reverse mortgage calculator and other resources online.

Limits for withdrawals during the first year.

As of October 1, 2013, there is a cap on the amount you can take out in the first year. Your lender will calculate for you how much you are authorized to borrow overall, based on your age, the interest rate, and the value of your home (or check the calculator above for an estimate). This number is known as your initial principal limit.

Generally, you can take out up to 60% of your initial principal limit in the first year. If the amount you owe on an existing mortgage (or other required payments) is more than 60% of this limit, you can take out enough to pay off your mortgage (and any other required payments, including upfront loan fees) plus cash of up to 10% of the initial principal limit.

How you receive your money matters.

If you choose an adjustable rate line-of-credit or monthly payout, you can access your remaining funds after the first year. But if you choose a fixed-rate, lump-sum loan, you will only be able to access the amount permitted under the first-year withdrawal limits. The remaining loan amount is forfeited.

Tip: Just because you can borrow a large sum does not mean that’s the best choice for you. Talk to a reverse mortgage counselor. You can find a HUD-approved housing counselor by visiting HUD's counselor search page or calling HUD's housing counselor referral line (1-800-569-4287).

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