There are many benefits to using a Reverse Mortgage Calculator, here are a few. The list is not exhaustive but demostrates why this is a great place to start:
- First off, it’s no-cost! That's right it’s free and costs nothing to use.
- It will calculate how much equity you qualify for with a reverse mortgage. This is a simple and effective way to work out how much funding will be provided for whatever goal you have in mind.
- The calculator will display some of your options and even connect you with an advisor if you so wish. The calculator will also display some of the the various options as they relate to differing funding outcomes on various programs like the HECM Saver and HECM Standard. This needs to be taken into consideration: fixed against adjustable rates, for example as this affects the final equity release.
- The calculator is normally pretty accurate. It can’t be guaranteed, but the interest rates displayed are usually linked to current market rates that banks use to calculate loan amounts. These are usually real estimations.
- Use it to compare the estimates on standard as well as fixed rates against the benefits of an adjustable rate. The calculator should demonstrate the Savers, Adjustable and the Fixed rate programs.
Consider the factors the calculator uses to arrive at this figure. This will give you an insight into the mechanics of the reverse mortgage calculator.
Age: The older you are, the more you can borrow. If two homeowners apply then the age of the youngest borrower should be used for the sake of the calculation that’s what the banks will use.
Amount of Equity: The higher the equity value (the difference between the appraised home value and any outstanding secured debt) the more you can release. So if the home is worth $300,000 with a small mortgage of say $50,000 attached then you have $250,000 in equity to play with. The more equity there is the better the candidate looks that the application will be successful.
Appraised Value: For an accurate picture of the amount of equity you can release you will need to have the property appraised, or in the preliminary stages have it assessed by a professional. Don’t take your neighbors word for it. Just estimating is just that - an estimation so the numbers will more than likely be off.
You Financial Position: It is becoming a more common practice now for lenders to review the applicants financial position. This is a relatively new development but lenders will now looks at credit worthiness such as credit score, income against commitments, etc. The HUD has already approved that this level of assessment is necessary. Most reverse mortgage calculators don’t allow for this, so they are based on a no credit check, no income assessment basis.
Interest Rates: If the loan has lower rates then it usually has lower fees attached which means there will be more equity available to the applicant. But interest rates do vary and there are big differences between fixed rate and adjustable rate programs. You should shop around as soon as you have some information to play with.
Get some real data today with our Reverse Mortgage Calculator. Just click the link! Or scroll to the top of the page and start the process from there with our Quick Start Calculator.