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jerrisam · Joined: 29 Sep 2008 Posts: 1 1.67 Dollars($)

what is the required amount of equity needed for a reverse mortg.

smithsussane · Posted: Mon Sep 29, 2008 9:23 pm Post subject:

Hi jerrisam!

Welcome to Forums!

As far as I know, there is no fixed amount of equity needed for a reverse mortgage. It may vary from state to state.

Feel free to ask if you have further queries.

Sussane

Posted: Tue Sep 30, 2008 3:17 am Post subject:

Hi jerrisam!

You can speak to lender about the equity required because I haven't heard anything as such. I think it will vary from state to state as well as depend on the cost of the house at present.

Thanks,

Jerry

gmakerley · Posted: Tue Sep 30, 2008 10:13 am Post subject:

there is a complicated formula that calculates based on your age, the amount of mortgage debt currently on the home, if any, and the value of the home.

actually, if you're adept at it, you can find a calculator on the aarp website - www.aarp.org - and find out pretty easily. the calculator does not ask for the mortgage balance (if any) but you'll need to factor that in when you get a result.

Guest

I have just begun to study this subject and am confusd. Say our house is assessed at $240 and that we owe about 180. Would we ever qualify for a reverse mortgage? (We are both age 70). The difference is the cash we would get....and then we use this cash to make the mortgage payments?
It would not last very long! When that case is used, then what do we do?

harrywallace07 · Joined: 25 Aug 2009 Posts: 42 -0.10 Dollars($)

hi jerrisom,

welcome to forum

as far as i know there is no set amount of equity required. The total amount you'll qualify for depends current equity, age, and FHA lending limits.

gmakerley · Posted: Thu Aug 27, 2009 6:20 am Post subject:

suzanne, the numbers you cite are awfully close to each other, and i know that the formula is tight. you can research for yourself, at least in part, at the AARP website (aarp.org). there is a handy calculator there that ought to be helpful for you.

Guest

Sorry if I am taking too much space. My husband and I are still working, but see the writing on the wall. My daughter, though unaware of our current pressing need to make decisions, is very sympathetic and willing to help. Would there be a investment advantage for my son-in-law in this?

gmakerley · Posted: Thu Aug 27, 2009 11:22 am Post subject:

too much space? not at all...

by investment, do you mean the possibility of his purchasing this home to rent it back to you? i don't get the question, unless that's what you meant.

by my reckoning, knowing what little i know about reverse mortgages, it appears as if you'd have insufficient equity to be able to draw much out.

as for using the funds to make payments, that's contrary to what a reverse mortgage is about. in fact, no payments are due on such a loan; it is payable upon sale or death.

loomiswebb · Joined: 27 Aug 2009 Posts: 3 2.76 Dollars($)

Homeowner has a house Appraised at $240,000, and a mortgage balance of $180,000.

Reverse mortgage is not going to happen.

Reverse Mortgages, are limited to approx. 39% ($93,600) of their home's current ($240,000.) appraised value.

But they owe $180,000. so the $93,600. isn't enough to pay off the existing mortgage.

The homeowner simply doesn't have enough equity to qualify.

And that's probably fortunate for the homeowner.
It's not a good program for homeowners.

As currently structured, a Reverse mortgage simply siphons off all of your hard earned equity without yielding any cash to satisfy other obligations, leaves no safety net, and just doesn't make good financial sense.

A far better option, particularly for seniors, (if anybody is currently offering it), would be a fixed rate mortgage offering 20% shared appreciation.

The homeowner would refinance, hopefully pulling out a little cash at the same time. The mortgage rate would be lower than current market rates. There's a trade-off, but it's a reasonable one.

The lender would receive 20% of any future appreciation above the current appraised value in return for refinancing the home at a lower rate of interest.

gmakerley · Posted: Fri Aug 28, 2009 9:35 am Post subject:

i don't have a particularly favorable image of someone mortgaging their home in order to give up a portion of future appreciation to a lender.

Guest

Does my husband and I qualify for reverse mortgage? We really need your help! I will be 62 this coming Nov. 9th, My husband is alreay 66. We want to stay in this home. Having a battle with Saxon Mortgage, trying to get them to work with us on a modified mortgage plan, this has been going on since last Sept 2008. Legal Aid and Commissioner of Banks are involved in out quest to save our home. HELP

Guest

I just caught some of the type o's in my questions. Oops

hemsleysue · Joined: 13 Sep 2009 Posts: 72 0.02 Dollars($)

as far as your age is concerned, you are meeting requirements. if you have sufficient equity in your house, you can apply for reverse mortgage.

You can discuss with other lenders as well

gmakerley · Posted: Sat Oct 03, 2009 7:50 am Post subject:

so true...the equity you have in your home will be the major deciding factor, linda. the more, the better, of course; you can go on the aarp website and there's a handy calculator they have that would allow you to estimate how much you may qualify for.

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how much equity is required for a reverse mortgage