Several factors determine how much money you can borrow through a reverse mortgage. Those factors include your age, the interest rate offered, the home’s value, and how much equity you have in the home. A reverse mortgage calculator will estimate how much money is available to borrow and your remaining equity. The borrower must supply their age, home value, and any current mortgage balance, if applicable.
Borrowers can receive money as a lump sum, monthly payments, a line of credit, or a combination of all these options. The best course of action will depend on the individual financial situation and strategy.
Selling or Refinancing With a Reverse Mortgage
Selling a home with a reverse mortgage works very much like selling a home with a traditional forward mortgage. When the home is sold the proceeds from the home sale are applied to the mortgage balance. The remaining money goes to the borrower or their heirs.
It is also possible to refinance a reverse mortgage. Generally, people choose to refinance a reverse mortgage if they want to add a new person to the mortgage, (as in the case of marriage), or if the house has increased substantially in value and they would like to tap additional equity.