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Reverse Mortgage Calculator
What Does A Reverse Mortgage Calculator Tell You?
A reverse mortgage calculator provides you with a ball-park figure based on the information you supply. Since not all figures that may actually apply to the mortgage calculations are entered here, this figure is only a close estimate. Other numbers will also have to be considered as part of the calculation when you go through the actual process.
Age Is an Important Factor in Reverse Mortgages
One of the main factors that will determine how much money you will be eligible to receive is your age. If you choose to receive payments, the younger you are will mean that your money must be spread out over a longer period of time - which results in receiving less each month. For those who are older, more money will be available each month because it does not need to be spread out over such a long period of time.
Other Important Reverse Mortgage Factors
The results from the Reverse Mortgage Calculator are also based on several factors including the amount of money you still owe on your home, the amount of equity you have in it, and the current rate of interest. The type of mortgage you choose will also determine how much you will be eligible to receive. You will need to choose between a fixed-rate and an adjustable rate mortgage. The fixed-rate option will give you a one-time lump sum.
Fees and Other Costs
The amount of money that you can receive will vary from one lender to another. This is based on the reverse mortgage rates at the time, various fees, and on how you want to receive your money. Higher interest rates will mean that you will receive less money. Some values are set by the Government and cannot be changed, such as the lending limit and some of the closing costs. Insurance costs are also figured into the calculation and it will be necessary to have it to maintain the reverse mortgage.
Use a Reverse Mortgage to pay-off a current mortgage
This is one of the most common reasons seniors choose to get a Reverse Mortgage. All outstanding liens against the home being used on the loan must be paid with the Reverse Mortgage funds first. After all liens are paid in full, you can do whatever you want with the remaining balance.
Payment Choices
The way that you choose to have your money distributed to you will also affect how much money that will be available. The choices that you have are:
- Lump Sum - you can choose to take a percentage up front cash amount - or 100% (for fixed-rate mortgage).
- Monthly Payments - payments can be issued to you on a monthly basis for the rest of your life, or for a set period.
- Line of Credit - you can take a cash amount, and then have a percentage of the money available when you need it in a line of credit.
- Combination - it is possible to get a combination of the above choices, such as a lump sum of 25%, monthly payments, and a line of credit for large purchases.
Advantages of Reverse Mortgage
A reverse mortgage will provide you with several great benefits. For one thing, your home still remains under your ownership. It can provide you with a monthly cash flow for life and it is tax-free, but you may want to consult a tax advisor to be sure. Any money not distributed in your lifetime is passed on to your heirs once the house is sold.
