Jeff Brown from Knight Ridder Newspapers discussed the dynamics of reverse mortgage. Because the total money owed in a reverse mortgage loan can in no case exceed the value of property, lenders usually will put a fat margin between the home equity and the money one can borrow. It makes the reverse mortgage products as an insurance for your longevity.

The longer you have the loan, the more interest you would owe. But federal regulations limit the total amount owed to the value of the property. If the property value falls or if the homeowner lives to be very old, interest charges or money received on the monthly payment plan can exceed the property's value.

That, of course, is a risk that worries lenders. To reduce this prospect, they limit the initial loan amount, considering factors such as interest rates and the homeowner's life expectancy. (If you have a previous loan on the property, a portion of the reverse mortgage must be used to pay that off.)

Hence, the older you are, the more money you can get. A 62-year-old with a $150,000 home might get $83,000, while an 85-year-old could get $113,000.

In the same way, lower interest rates allow homeowners to lock in much larger loan amounts than they can get when rates are high. Once this loan amount is set, it is permanent, even if interest rates rise later. So it might pay to lock in now, while rates are low.