Home Keeper: Determining Your Loan Balance

HOME KEEPER REVERSE LOAN BALANCE
Finding out how your loan balance is determined starts with knowing what your loan balance is, and what it is not.   With your Fannie Mae Home Keeper Reverse Mortgage, you are given a set amount up to which you can borrow.  This amount is known as the maximum principal amount, and will not change over the life of your loan.   You will always be able to borrow up to your maximum principal, but you will only owe money on what you actually borrow. 
 
Your actual loan balance is the amount of money that you have in fact borrowed against the maximum principal as well as any other fees and loan costs that have been rolled into the loan.   These reverse mortgage fees can include things from servicing and origination fees to closing costs that were rolled into your loan, and the greater they are, the less there will be available for you to actually borrow from.   You may also be dealing with monthly servicing fees and interest that accrues on the amount that you have already borrowed so far. 
 
Your loan balance will grow each month because of the monthly loan advance that you receive as well as the fees and costs that become associated with it.   You can determine how much you have left available to you by subtracting your loan balance from your maximum principal.
 
As an example of how your reverse loan balance will grow, imagine that you are scheduled to receive a monthly payment of $200 against your maximum principal.   The first month, you will be paid the $200, and your loan balance will rise to $200 plus any closing costs or fees associated with the loan.  The next month you will be paid again, and your loan balance will rise by the additional $200 plus interest on the first month’s payment.  Your loan balance will grow thusly for the lifetime of your loan, getting larger each month as you receive your monthly payments and as you are charged interest or fees on your reverse mortgage.   You do not have to pay back the reverse mortgage until you leave your house, fail to maintain your home, or fail to pay property taxes.  
 
Feel free to contact your local reverse mortgage lender for your information.