Prior to applying for a reverse mortgage, you might want to understand the reverse mortgage limits and how they could affect you depending on the value of your property. In reality, there are “hard” limits and “soft” limits.

A hard boundary is the upper ceiling set by the FHA. Currently, 90 percent of reverse mortgages are FHA insured. Of course, the ceilings set by the FHA are very imp;ortant.

At present time, the FHA upper limit varies from $200,160 and $362,790. The lower ceilings are assigned to country areas and the higher ones for large cities or states where the cost of living is more expensive. Also, the upper limit can be different up to 150 percent in Alaska, Guam, Hawaii and the Virgin Islands.

These ceilings are raised every year. Still, to have a better idea of how much you can plan to borrow, you need to understand about the soft limits. Soft limits owners of high price homes to borrow more than those with homes around the FHA ceiling and also set the actual amount you may get.

The soft limit might be thought as the actual limit for your house because it will fix how much you can get. The funds that you can get are calculated from the lower of the estimated value and the FHA ceiling.

The actual funds owners might get is dependant on their age, the present interest rates, diverse credit costs and the estimated value of their house or FHA’s home limits for their zone. Usually, the more valuable your house is, the older you are, and the better the interest rates, the more you may get.

For instance, owners with a $100,000 home at 9% interest could get up to 22% of the house’s value if they’re 65. If the owners are 75, they can get up to 41%, and up to 58% if they’re 85 years of age.

Also, keep in mind that there are no asset or income limits on borrowers applying for a HUD’s reverse mortgage. This means that you could have bad credit or earn little income or too much income and still qualify for the mortgage. Nobody can be rejected because income, assets, or bad credit.

So, prior to you apply for a mortgage, talk with your [trusted|specialized[/spin] home loan broker about the reverse mortgage limits you may have a better idea of how much money you might receive by getting a reverse mortgage.

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