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First, the loan amount is determined by the lender, by using a formula set out by FHA that takes into account the value of the home, the age of the borrowers, and the current interest rate to determine the loan amount.\u00a0<\/p>
Usually, it is anywhere between 40 \u2013 60% of the home value depending on your age. Once they identify your, qualifying amount they will check how you would want to take your money at the closing?\u00a0<\/p>
Costs of the loan will be wrapped into the loan, so you will have a starting balance equal to those costs plus any other funds you take.\u00a0<\/p>
You can take your loan proceeds in the form of a monthly payment for as long as you live in the home.\u00a0<\/p>
The lender will give you tax-free funds on the first of every month. You would be receiving a mortgage statement showing you the prior month\u2019s loan balance, the amount of interest and insurance charged, and the new loan balance.\u00a0<\/p>
Or you could like to take all your loan funds which are ready and available, as you need them in a line of credit.\u00a0<\/p>
In this scenario, you would receive a statement each month from the lender showing the existing loan balance and the number of funds previously available in the line of credit.\u00a0<\/p>
Any withdrawals you made from the line of credit the prior month and the new available line of credit would show in the statement.\u00a0<\/p>
One of the coolest features of this particular scenario is that the line of credit on the reverse mortgage grows over time.\u00a0<\/p>
The amount available to you and the loan of credit is equal to the rate charged on the loan itself plus one and quarter percent.\u00a0<\/p>
A reverse mortgage line of credit in the amount of $100,000 would be over one hundred and four thousand the next year.\u00a0<\/p>
It is a great incentive to limit your withdrawals building up that line of credit over time so that when you are 70, 80, and 90 and in dire need of money for any health emergencies you can withdraw more.\u00a0<\/p>
You can also use up all the money to purchase a second residence or invest in property. You can also combine those different payoff options.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t