I don’t know the value of your home currently, but many houses are again seeing some appreciation currently.Įspecially if your home was worth more than the Maximum Claim Amount at the time you did your first loan, you may be an ideal candidate for a HECM to HECM refinance. However, I may be able to offer a ray of hope.Īs I told you, HUD has raised the Lending Limit (or Maximum Claim Amount) to a current limit of $ 970,800. So without knowing how much you owe on current liens at the time and how much you drew from the loan annually, I could not give you a helpful comment on whether or not it is realistic that there would be any money left on the original line. Otherwise, the system cannot account for draws and numbers about which it has no information. The amortization schedule you received with your loan when you first signed your documents would have shown you how long the line would last and how the balance would rise, but only if you advised your lender how much you planned to draw yearly so they could run that number for you.
Just for the record though, I have seen several simulators where the funds available to the borrower actually exceeded the original maximum claim amount but that was in the case of borrowers who had no liens to pay off and allowed the line to grow for 6 to 7 years with no draws whatsoever. This growth of the line is what allowed you to ultimately borrow more total dollars than if you had borrowed all your available funds all at one time…although even with growth in the line of credit, you may not be able borrow all the way to your Maximum Claim Amount. The benefit amount is also known as the Principal Lending Limit and this is the amount you receive based on your parameters and from this Principal Lending Limit, you would subtract any mortgage or other liens you had to pay off, any costs you incurred for the loan and the remaining funds would be available for you to take as a lump sum, as a monthly distribution, to leave in a line of credit and take as you desire or as a combination of any or all of those options.ĭepending on how quickly you used the loan available to you in the early stages, the balance available to you grew over time on the unused portion.
This is the amount that the lender then uses to determine your benefit amount. If you had a Maximum Claim of $250,000 at the time you took out your reverse mortgage, that would mean that your property either appraised for that amount or that was the HUD maximum for your area at the time. This limit is under a temporary increase to $970,800 at this time that was put in place under the American Recovery and Reinvestment Act of 2009 and has been extended until the end of 2013 and will revert to $417,000 at that time if it is not extended again.
The Maximum Claim on the reverse mortgage in 2021 would have been the lower of the property value or the HUD lending limit, not the maximum amount you can borrow. I see that you use the term “Maximum Claim” and give a figure of $250,000.
#Principal definition mortgage free
Without seeing your closing documents or even your Loan Comparison Page, I can only guess at what is going on here but let me take a stab at it and if this does not seem to come anywhere near your circumstances, please feel free to contact me and I would be happy to go over your individual information with you.įirstly, there are a lot of terms with a reverse mortgage that are not like or even used in a standard or forward mortgage.
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