A reverse mortgage is a financial product that was first developed in 1961. Over time, they have grown to cater to the needs of elderly people in the US who want to access the equity that they have invested in their house. A reverse mortgage quote is not fixed for everybody, rather it depends upon certain factors. Here we have identified three most crucial factors that can raise the reverse mortgage quote dramatically.
Age of the Borrower
As a rule of thumb, the older the borrower, the lower would be the reverse mortgage quote. This means that if you are 62 years old, then the quote will be high. This is because the life expectancy in the US is 79 years. Thus, the lender will be faced with the longevity risk. This risk will be priced into the reverse mortgage quote, raising the overall rate.
Number of People Jointly Applying for a Loan
The rate for one borrower will be low, but if the borrower along with their wife is applying jointly for a reverse mortgage, then the quote will be high. This is because the probability that the lender will be required to provide payment for an extended period of time is high. It is imperative to mention here that you should never buy reverse mortgage alone when you have your aged wife living with you too. Otherwise, she will be forced to leave the house after you die since the lender will sell the house to recover their lent amount.
The Value of Your Home
The appraised value of your home also plays a significant role in determining the reverse mortgage quote. If your house is already on a mortgage and the payment has to be made, then the value of your home will decrease and the quote will increase.
Longbridge Financial is one of the reverse mortgage experts that are approved by the Federal Housing Administration (FHA). It operates in 46 states and is committed to providing financial peace of mind to the elder generation.