Everyone who has thought about a Reverse Mortgage has asked this question. What could be more important? However, the way the lender actually does this can be confusing to most people. Here are the most important considerations.

Age of the Borrower
This is the primary consideration that a Reverse Mortgage lender has to take into consideration. First of all, you and any other borrower on the mortgage will have to be at least 62 years of age. Secondly, the younger you are, the less you will be able to get because the lender will want to make sure that the amount of equity in your house will last you. And of course, the younger you are, the more time you will have to use up the money from your home’s equity.

The Value of Your Home
The next most important consideration for the lender is the value of your home. Normally the maximum amount available to borrow will be capped at a percentage of your home’s value. Depending on your age this could be as high as 80%. In order to determine this amount you will have to have an appraisal done which will fix a value based on recent sales of homes that are similar to yours in your area.

How you will receive the loan proceeds
There are two basic options here. One is a lump sum payment and the other is monthly installments. Paying monthly installments is much less riskier than paying out a lump sum payment. So therefore, you would receive more money by taking the installment option.

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