A hard limit is the limit set by the FHA. At present time, 90 percent of reverse mortgages are FHA insured. Therefore, the upper barriers set by the FHA are very considerable.



At this time, the FHA limit fluctuates from $200,160 and $362,790. The lower limits are used for rural areas and the higher ones for large cities or states where the living cost is more expensive. Also, the limit can be adjusted up to 150 % in Alaska, Guam, Hawaii and the Virgin Islands.

These upper barriers are raised every year. However, to have a realistic picture of how much you can expect to get, you have to understand about the soft boundaries. Soft ceilings restrain homeowners of high price houses to borrow more than those with homes around the FHA boundary and also set the actual amount you can get.

The soft boundary can be thought as the actual limit for your house because it will set how much you can get. The amount that you can get is arrived at from the lower of the appraised value and the FHA boundary.

The actual funds owners can borrow depends on their age, the market rates, diverse credit fees and the appraised worth of their home or FHA's mortgage ceilings for their region. In general, the more valuable your home is, the older you are, and the lower the interest rates, the more you can borrow.

For instance, homeowners with a $100,000 mortgage at 9% interest rate might get up to 22% of the home's value if they are 65. If the homeowners are 75, they might get up to 41%, and up to 58% if they are 85 years of age.

In addition, remember that there are no asset or income ceilings on borrowers applying for a HUD's reverse mortgage. This basically means that you can have poor credit or earn no money or too much money and still be able to qualify for the loan. Nobody could be excluded because earnings, assets, or poor credit.

Remember, before you get a home mortgage, discuss it with your professional home mortgage broker about the reverse mortgage limits so that you may have a more realistic representation of how much money you can receive by apply for this kind of home mortgage.