A reverse mortgage is one of the few products out there that GIVES you MORE money the older you get!  There is no exact calculation that determines how much a reverse mortgage lender pays you, but using a reverse mortgage calculator will help you get an idea of how much you can receive.  Click here for our reverse mortgage calculator.
  
The amount you can borrower depends on the following:

• AGE: The older you are, the more money that you will generally get from the lender.
• HOME VALUE: More equity in your home means more cash to you.
• LOCATION: If you live in a neighborhood with higher home values, you’ll get a bigger reverse mortgage loan if you decide to go with a Home Equity Conversion Mortgage (HECM) or a Fannie Mae Home Keeper Loan.
• INTEREST RATES: Something beyond your control, but still a factor, the lower the interest rate, the higher loan value you’ll receive. 

Since age is one of the factors in determining your reverse mortgage loan value, it may be worth waiting a few years to get more money from the lender. 
 
Take the following example of two borrowers born four years apart:

By waiting just four years, you will be able to receive an additional $10,000.  What does this mean?  It means that you should not necessarily get a reverse mortgage loan the second you turn 62 years old if you do not need it.   At the same time however, you should not wait too long to get it because a vacation at 92 is different than going on a vacation at 67.  Determine what scenario is best for you with you with our reverse mortgage calculator.

How exactly do you determine the amount of money that you can expect from your reverse mortgage lender every month? This type of reverse mortgage info can be estimated through your trusty reverse mortgage calculator.

 
Your Monthly Allowance
Your monthly loan advance is determined through an intricate process that involves the calculation of the amount of cash your home value can give you or the calculation of your principal limit.
 
As you know, several factors are simultaneously considered in setting your principal limit. These factors include your (and your co-applicants’) age and the value of your home. The principal limit is typically a percentage of your home equity and is bounded by the maximum allowable amount set by Fannie Mae.
 
After setting the principal limit, your reverse mortgage lender will approximate the number of years that you and your co-borrowers(s) – if you have any – are expected to live. Life expectancy tables based on statistically valid mortality rates are used for this purpose.

 
Interest Rate
Since reverse mortgages are loans, the lender quite naturally charges interest on the money you are drawing through your reverse mortgage loan. The rate of interest levied on a Home Keeper Mortgage loan is variable. That is, it varies with the average secondary market index released every week by the government.
 
However, even if the interest rate can and does change, you are guaranteed that your loan’s annual percentage rate will not increase by more than the maximum allowable rate increment which is 12 percent. Thus, an originally 6 percent APR will not go beyond 18 percent in the whole life of your loan.

Reverse mortgages are offered in all 50 states and the Caribbean.  The difference between a reverse mortgage and a traditional reverse mortgage is that with a reverse mortgage, the lender pays you to live in your home.  You will never have to pay back the loan until you leave.
 
Hundreds of thousands of seniors have enjoyed the many benefits a reverse mortgage can bring.  There are, however, some pitfalls that you should be aware of.
  
REVERSE MORTGAGE PITFALLS INCLUDE:

• Loan Fees
  With a reverse mortgage, you are converting your equity into cash.  That cash, however, comes at a price.  There are fees associated with the loan when you sign up, which is usually covered with the cash you receive when you get paid.  The cash you use is also charged interest, which is payable when the loan becomes due (when you leave your home).
• Rising Debt, Falling Equity
  Every time a check is paid out to you from your reverse mortgage loan, the equity in your home declines.  In other words, you are “spending down” the equity in your home in exchange for the ability to continue living in it, without making any repayments while until you leave the property.
• More Complicating than a Traditional Mortgage
  A reverse mortgage can be confusing with all of the fees associated with the loan.  It is important that you contact an approved HUD Counselor, your lawyer, and/or financial advisor so you can understand what there is to know about a reverse mortgage.A reverse mortgage is not for everyone.  You should consult an experienced financial advisor to help you identify what your options are.  For more free information on reverse mortgages, feel free to browse through www.RMHelp.org.

With a reverse mortgage loan, there are a variety payment options (where the lender pays you) for you to choose from based on your needs. 
 
Here are the main options:

Lump sum
An option available with either the Home Equity Conversion Mortgage (HECM), Home Keeper or Cash Account, the lump sum is a nice way to get paid if you have a large expense to cover.   With this option, it is up important that you budget your cash appropriately.  A better option would be the Line of Credit.
  
Line of Credit
Available with either HECM, Home Keeper or Cash Account, a line of credit account leaves it up to you to determine how much receive.  All it takes is a simple form to complete every time you would like to withdraw funds.
 
Monthly Cash Advance/Tenure
Available only with the HECM and Home Keeper, a monthly cash advance gives you the security of knowing that a check for the same amount will be coming to you every month.  The greatest benefit of this option is that the reverse mortgage lender will continue to pay you even if they exceed the value of the loan and will continue for as long as you stay in your home. 
 
Combination
Just as the name says, a combination can be just about any variation of the options above.  For example, you can take a 50% lump sum on the reverse mortgage loan and take the difference as a line of credit.  The beauty of the combination option is that you can decide exactly what you receive based on your needs.