How much equity must I have on my house in order to obtain a reverse mortgage? say I have a $300,000 house with half the principle paid.By John K on 04.12.2016
There are several factors that determine how much money you can receive from a reverse mortgage. Your age, property value, and interest rates will determine how much you will receive as a percentage of the property. HUD has also changed the program in recent years to limit the amount borrowers can take in the first 12 months if they are not paying off an existing mortgage.
The minimum age a borrower must be to obtain a reverse mortgage is 62 years of age. The amount that a borrower receives in benefit at 62 years of age is approximately 52% when interest rates are at or below 5% (which they are now). Then depending on where you are in the country any cost to get the loan would be deducted from that benefit amount. Some areas of the country the costs are higher because the state these such as intangible tax, other mortgage taxes and the title fees run higher than other parts of the country. It also pays to compare lender costs from one lender to another.
So when you say half the principal is half paid, if you are telling me that you owe $150,000 on a home valued at $300,000, the chances are very good that you will be able to get a reverse mortgage without having to come out of pocket to pay fees if you live in an area of the country where the fees are not too high and if you are older than 62 years of age. If you just turned 62, and you live in one of the areas where the costs are the highest, you can still get the loan but it may be tougher to do so without having to put a little bit of cash into the transaction to close.
Your best bet is to go onto a website such as ours and obtain a free quote. There is no obligation, we do not require you to give us a lot of personal information, and we will not hit you with a lot of high pressure sales just to find out.
If you would like a quick estimate feel free to use our online calculator or call us Toll Free (800) 565-1722