Final answer:
The rules for the percentage of equity you can take out on a HECM are determined by factors such as the borrower's age, home value, and interest rate. Generally, the older the borrower and the higher the home value, the more equity can be accessed. However, the specific limits are set by the FHA and may change over time.
Step-by-step explanation:
With regards to the Home Equity Conversion Mortgage (HECM), there are no specific rules for the percentage of equity you can take out. The amount of equity that can be accessed through a HECM is determined by several factors, including the age of the borrower, the value of the home, and the interest rate. Generally, the older the borrower and the higher the home value, the more equity can be accessed.
For example, if a borrower is 62 years old, their home is valued at $500,000 and the interest rate is 4%, they may be able to access around 60% of the home's appraised value.
It's important to note that the Federal Housing Administration (FHA) sets certain limits on the loan amount and the maximum percentage of the home's value that can be borrowed. These limits are subject to change, so it's best to consult with a licensed mortgage professional for the most up-to-date information.