Your reverse mortgage payout depends on a few key factors. Here is what determines how much cash you can access.
What determines how much you can borrow?
Three main factors set your reverse mortgage amount: the age of the youngest borrower, your home's appraised value (credited up to the 2025 FHA limit of $1,209,750), and the expected interest rate. HUD applies a principal-limit factor that rises with age and falls as rates rise, so a 75-year-old qualifies for more than a 62-year-old on the same home. Any existing mortgage must be paid off from the proceeds first, reducing the cash you net. Required set-asides for taxes and insurance can also lower your usable funds. Call 1-800-MEDIGAP to calculate your personalized amount.
How can you maximize your reverse mortgage payout?
You can increase your available funds by waiting until you are older, since principal-limit factors grow with age, and by applying when interest rates are lower. Paying down or eliminating an existing mortgage before applying leaves more cash available to you. Choosing the right product, such as an adjustable-rate line of credit that grows over time, can also expand your long-term access to equity. Higher home value helps, up to the FHA limit. Strategy matters here. A specialist at 1-800-MEDIGAP can show you how to structure the loan to maximize your benefit.