2024 Reverse Mortgage Age Requirements
Michael G. Branson, CEO of All Reverse Mortgage, Inc., and moderator of ARLO™, has 45 years of experience in the mortgage banking industry. He has devoted the past 19 years to reverse mortgages exclusively. (License: NMLS# 14040) |
All Reverse Mortgage's editing process includes rigorous fact-checking led by industry experts to ensure all content is accurate and current. This article has been reviewed, edited, and fact-checked by Cliff Auerswald, President and co-creator of ARLO™. (License: NMLS# 14041) |
Reverse mortgages are valuable tools for older Americans. They allow you to access the equity in your home without making monthly mortgage payments.
The most well-known option is the Home Equity Conversion Mortgage (HECM), a program backed by the Department of Housing and Urban Development (HUD). This program offers a secure method for seniors to borrow against their home equity.
How Much Can I Receive from a HECM Reverse Mortgage?
Reverse mortgage proceeds can be accessed in a few different ways—as a line of credit, as monthly term or tenure payments, as a lump sum, or some combination of those options—and can be used in whatever way you’d like for groceries, medication, or even utility bills.
The amount of money you can receive from a reverse mortgage depends on a few factors:
- Your Age
- Home Value
- Current Interest Rates
Your age plays a significant role because the older you are, the more money you qualify for when you take out the reverse mortgage. The amount of money is based on principal limit factors, which give you more money as you age. For example, if you’re a homeowner who owns your home, check out the examples below.
2024 HECM Reverse Mortgage Benefits by Age
Age of Borrower Principal Limit Factor Current Lending Limit
62 38.9% $1,149,825
65 41.0% $1,149,825
70 44.5% $1,149,825
75 47.3% $1,149,825
80 51.6% $1,149,825
85 57.5% $1,149,825
90 64.0% $1,149,825
2024 Proprietary Programs Work at Age 55
Borrowers who are not yet 62 but are 55 and over can also seek a reverse mortgage from one of the “Jumbo” or “Proprietary Programs” available. HUD does not insure private programs, so no mortgage insurance is required.
The requirements and property eligibility criteria can be different but very similar, and borrowers who want to get their 62nd birthday immediately can always investigate one of the private programs to determine if it will meet their needs.
Proprietary Reverse Mortgage Loan-to-values (LTV) from Age 55
Borrower Age | Loan-to-value | Loan-to-value | Loan-to-value |
---|---|---|---|
Rate | 9.375% | 9.990% | 9.740% |
55 | 21.5% | 29.5% | 29.5% |
60 | 23.0% | 31.0% | 31.0% |
65 | 24.7% | 32.7% | 32.7% |
70 | 27.6% | 35.6% | 35.6% |
75 | 32.1% | 40.1% | 40.1% |
80 | 37.0% | 45.0% | 45.0% |
85 | 42.8% | 50.8% | 50.8% |
90 | 43.4% | 51.4% | 51.4% |
Available Payout: Lump Sum
*Divide your home value by the LTV percentage to calculate your loan amount.
E.g., $2,000,000 value, age 70 = 35.6% LTV or $712,000 loan amount.
Which Program Should I Choose?
There are several different HECM programs to choose from: fixed-rate and adjustable, lump sum distributions, and monthly payments or lines of credit from which the borrower can draw as needed/desired. What is right or best is what is right or best for the borrower’s circumstances. The fixed-rate loan seems attractive to many borrowers, but there are several downfalls borrowers must consider.
Namely, fixed rates require a full draw of all sums available. If you do not need all the money to pay off existing liens, HUD requirements on their program only allow a portion of the line to be accessed in the first 12 months. On a fixed-rate loan with no subsequent draws available, any amount not available in the initial draw is lost to the borrower.
Also, since fixed rates are often higher than adjustable rates and interest rates determine how much money a borrower will receive, adjustable-rate borrowers often receive higher benefits in today’s interest-rate environment.
Finally, the adjustable program gives borrowers more options regarding how they will receive their funds (remember, with the fixed rate, the only option is a one-time full draw of all funds available). Borrowers who choose an adjustable-rate loan have several options for receiving their loan proceeds, including a line of credit, monthly payments, or even a lump sum.
The funds in the line of credit grow annually at the same rate as the interest accrual rate plus the MIP accrual rate on the unused portion. This is not interest you are earning but relatively greater borrowing power later as the growth amount increases the available line.
You only owe what you borrow and accrue interest on the outstanding balance, so having the additional money available costs you nothing and only needs to be repaid later if you draw and use those funds.
Age FAQs
What is the minimum age for a HECM Reverse Mortgage?
What is the minimum age for a Jumbo Reverse Mortgage?
I am 71, and my wife is 69. Would it benefit us to wait 6 months until my wife turns 70 before we get our reverse mortgage?
Is there any age limitation to getting a reverse mortgage?
Can you outlive a reverse mortgage?
Can I get a reverse mortgage if my daughter (Co-owner of the house) is not yet 62?
Can your heirs join you in a reverse mortgage if they meet the age requirement?
Can I obtain a reverse mortgage if I have less than 50% equity in my home?
In Texas, do both applicants for a reverse mortgage need to be at least 62 years old?
My spouse and I are 62, but his name is not on the mortgage. If I died before him, would he be allowed to stay in the home with the reverse mortgage?
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