Reverse Mortgage Net Principal Limit

See: Reverse Mortgage. See: Reverse Mortgage Initial Principal Limit.

A reverse mortgage gives older homeowners the ability to generate income from the equity they have in their homes. However, there's a limit to how much they can receive from the deal. (Otherwise, if a person lives to be 130, the bank would be forced to hire out a hitman just to limit their losses on the transaction.)

That total (the amount the borrower can receive) represents the principal limit. The "net" part comes into play because the figure takes into account the loan's closing costs. It's the net amount (rather than the gross amount).