Reverse Mortgages 101

The amount of the mortgage depends on:

• The age of the youngest borrower. (No one's health is considered).
• The current interest rate.
• Your equity in the home or the FHA insurance limit, whichever is lower. Your equity is the difference between the amount of any outstanding debt secured by the house (such as a mortgage) and its current market value.
• Loan fees.

The older you are, the greater the amount of money you will be able to receive as a Reverse Mortgage. The maximum amount for a reverse mortgage is set by federal law.

For an approximation of the gross amount you can receive as a Reverse Mortgage, see www.ReverseMortgage.org . (Keep in mind that "gross" is the amount before expenses are deducted.)

The net amount you receive depends on loan costs, which are expensive. Costs can include:

• An origination fee.
• An application fee.
• Closing costs (like a traditional loan)
• Premium for Insurance (that protects the lender if you outlive the value of your home.)
• A monthly servicing fee.

NOTE: Even if all you can borrow as a Reverse Mortgage is enough to pay off your current mortgage, or to receive payments equal to the payments due on your current mortgage, the loan may be worthwhile because it will reduce your monthly expenses.

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