Reverse Mortgage Calculators

Reviewed: November 19, 2014
By FinanceWeb

Calculating the Advantages

For many senior homeowners, there are untapped and valuable sources of funds from the equity in their homes. Reverse mortgage calculators can help senior homeowners decide whether this home equity finance option is right for them. Calculators provide a simple way to outline the value of the home, the amount of funds available, and disbursement options such as a lump sum, credit lines, and monthly payments. Calculators can help determine the future value of a reverse mortgage asset.

The Basics of Reverse Mortgage

A mortgage loan or refinancing can provide money but also require immediate repayment. Reverse mortgages provide immediate funds, and repayment occurs when the loan is settled, usually with the borrowers estate. Available from private, standard commercial or federally approved sources, reverse mortgages can help seniors have greater financial security without selling their homes, or borrowing in traditional mortgage loans. They can stay in their homes while opening a significant source of funds. Eligible homeowners have paid-off their homes or have substantial equity. Reverse mortgage financing options include a lump sum payment, a line of credit, and monthly payments for a term of years or life.

Expanded Reverse Mortgage Calculators

Companies that offer financial services such as planning and management services combine other products with reverse mortgage calculators. These combinations are clearly intended to expose the consumer to other financial products. However, there are clear advantages to combining the impacts of savings, compounding, Roth I.R.A. and 401(k) plans with an additional income from reverse mortgages.

The HUD Review Approval Procedure

The HUD Home Equity program is a benchmark for reduced costs and protection of the borrowers. The costs are significant because they include many necessary items of expense and loan fees. A loan origination fee, mortgage loan insurance premium, and appraisals and title insurance can easily total more than $10,000. The HUD program caps the overall value of the property valuation to $625.000. Fixed mortgages provide a lump sum payment while adjustable mortgages offer monthly payments or a line of credit. Lenders base the term of financing on many factors including the age of the youngest borrower. Upon settlement of the loan, the HUD program permits the balance to be passed to the heirs.

Alternative Reverse Mortgages

Using Reverse Mortgage Calculators can also provide a valuable comparison with creative private arrangements. Intra-family reverse mortgages offer an excellent alternative to government and commercial financing. Senior homeowners can work with their children or other close relatives to fashion a customized reverse mortgage financing arrangement. These custom fit arrangements can have important advantages. First, acceptance is not an issue, and the terms can be adjusted to meet income needs while permitting passing a greater amount of equity to the eventual heirs. Protected by deeds of trust, and legal formalities, professional services can make the process go smoothly.

The Value of Reverse Mortgage Calculators

Calculators are a useful device and a valuable free service provided by many financial services companies. They can demonstrate options and provide reports that consumers can compare side-by-side. They also provide a basis to compare alternative concepts such as a family–based reverse mortgage loan. Improved consumer knowledge and comparison-shopping advance the goal of financial security for senior homeowners. Reverse mortgage calculators provide a very useful tool for finding advantageous financial solutions for senior homeowners.