If you own a home worth $1 million, would it ever make sense to take out a reverse mortgage?The question arises because the maximum amounts that can be drawn on a home equity conversion mortgage – the type of reverse mortgage program available through the federal government – are based on the lower of appraised value, sale price and the Federal Housing Administration maximum claim amount, which currently is $636,150.
The owner of a $1 million house, or a $10 million dollar house, can’t draw any more funds from a HECM than the owner of a house worth $636,150.
Source: The Mortgage Professor: Does it make sense to take a reverse mortgage on a $1M home?