I want to clarify how reverse mortgages work, as they differ from traditional loans in several key ways.

Key Differences

1. Reverse mortgages do not operate on a traditional Loan-to-Value (LTV) basis.
   Instead, your eligible loan amount is determined by:

   • The appraised value of your property (or the national lending limit, whichever is lower).
   • Your age.
   • Current interest rates.

   This information is processed through a reverse mortgage calculator using a specific formula to determine your potential loan amount.

2. You can have an existing mortgage on the home, but it must be paid off.

   • If your home is fully owned, the loan proceeds can be accessed directly.
   • If there is an outstanding mortgage or lien, it must be repaid using the proceeds from the reverse mortgage.
   • If the reverse mortgage amount is not enough to cover the existing debt, you will need to cover the shortfall with other funds to proceed.

3. Financial responsibility is still required.

   • While reverse mortgage qualifications differ from traditional loans, borrowers must demonstrate financial responsibility.
   • This includes having a satisfactory credit history and enough income to cover ongoing property-related expenses and debts.
   • The loan approval process includes a residual income evaluation, ensuring you have sufficient funds left after paying debts and property charges, based on your household size.

Estimate Your Loan Amount

To get a personalized estimate, visit our website and use our non-intrusive reverse mortgage calculator.

• Simply answer a few basic questions—no personal information is required.
• You'll quickly see how much you may qualify for and explore different disbursement options, such as:
  • Lump sum
  • Line of credit
  • Monthly payments

If the preliminary figures align with your expectations, we’re here to help you explore further, including assessments related to income and credit.

Also See: Reverse Mortgage Principal Limit Explained