Home Equity Calculation: How Much Equity is in my Home?
A key factor in the value of your reverse mortgage and in helping calculate how much you qualify for is the home equity you have built up. A simple explanation of home equity is the difference between how much money you still owe on your home through outstanding liens or mortgages and the current selling value of your home. For example, if you still owe $50,000 on your mortgage and your home appraises for $200,000 you have $150,000 in equity.
With the help of a reverse mortgage, seniors can make use of this equity to help fund or finance their retirement as well as other expenses.
If you live in Pennsylvania, California, or Florida and would like to learn more about reverse mortgage requirements and how much of your equity you may have access to with a reverse mortgage loan, Contact Citizens Lending Group today.
Finding Out How Much Home Equity You Actually Have
Once you understand the basic details of reverse mortgage eligibility, it is time to understand the value of your home. If you have properly educated yourself on the reverse mortgage pros and cons and have decided to begin the process of the loan, your appraiser will determine the exact value of your home by comparing where you live today and the current state of your home with the selling price of other houses nearby. But how do you find the value of your home if you have not yet decided to begin the reverse mortgage process? Fortunately, there are several resources online that can help you estimate the value of your home.
Zillow.com is one good website to help you find out your home equity. Zillow works in a way similar to an appraiser. Their system looks at public records for homes that sold near your home and tells you what yours might be worth. It is important to check this around the time you are considering a reverse mortgage because housing prices can change frequently as the market fluctuates.
Once you have learned your home's value from a site like Zillow you simply have to turn to your bank statements about your mortgage to determine your home equity. Take the value of your home from Zillow and subtract it from the amount left in your mortgage. If you have already paid off your mortgage in full, your home equity is equal to approximately what Zillow estimated it to be. If you still have something left to pay, the difference between Zillow and what you owe is your home equity. Keep in mind, while this calculation may not be an exact number (since the exact value will depend on a professional appraisal), this estimate can give you a general idea of the equity you have in your home.
Once you know your home equity (or an estimate), you can begin to understand how much a reverse mortgage can help. You can borrow a portion of your equity that is equal to what you will be able to pay back when you sell your home. In most cases, you will never be able to owe more than your home is worth with a reverse mortgage loan.
Contact Us Today to Learn More About Home Equity Calculations
Knowing how much of your home's value you have available to access is one of the first steps to learning how much a reverse mortgage can help you. In California, Pennsylvania, or Florida, contact us at Citizens Lending Group today to learn more about reverse mortgage requirements and how much you may be able to qualify for with a reverse mortgage loan.