Benefits of a Reverse Mortgage

How much money can be borrowed on a Reverse Mortgage loan?

The maximum amount – or Principal Limit – is based on a combination of factors which include: the age of the youngest borrower, the current interest rate of the selected loan program at the time of closing and the adjusted property value reflected by the maximum claim amount as determined by the Department of Housing and Urban Development. Click here to determine how much money you could receive from a Reverse Mortgage loan?

Will a Reverse Mortgage affect any senior benefits?

The Reverse Mortgage benefits being received by a borrower will not affect Social Security or Medicare eligibility because these programs are not based on the assets of their recipients. However, in the federal Supplemental Security Income program (SSI), beneficiaries must keep their liquid assets under certain limits. If funds received from a Reverse Mortgage loan are not spent, such funds may be considered liquid resources and may adversely affect eligibility for SSI. In this situation, a borrower who currently receives SSI should never draw more money than needed. Regulations for state-administered programs such as Medicaid, AFDC and food stamps and for state-funded welfare programs (such as state supplements to SSI) all have different eligibility requirements. Therefore, we suggest consultation with a benefits specialist at the local Area Agency on Aging to determine how Reverse Mortgage payments could affect a particular situation.

How can funds be received from a Reverse Mortgage loan?

Depending on the Reverse Mortgage loan product, funds may be received as follows:

  1. Lump Sum Distribution – receiving up to 60% of all available funds up front when the loan disburses (3 days following closing)
  2. Tenure Option – receiving equal monthly payments for as long as the borrower occupies the property as their primary residence
  3. Modified Tenure Option – a portion of funds may be set aside into a line of credit within the Reverse Mortgage loan and the remaining may be taken in monthly payments
  4. Term Option – dedicating a specific amount to receive as monthly payments; however, once the money is depleted, there would be no further payments
  5. Line of Credit Option – having a line of credit within the Reverse Mortgage loan available to draw upon at the times and amounts determined by the borrower


To learn more, contact a Reverse Mortgage Banking Representative today!



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