How To Use a Reverse Mortgage Calculator

Before you try your hand at using a reverse calculator, you will need to get some information.  You will also need to think about exactly what you want out of the process.

  1. First, here are some facts that you will need to provide.
    • What is the approximate value of your home?
      • What is the approximate total balance payoff to any existing mortgages, first and second, on the house?
      • What are your total monthly mortgage payments, both any first mortgages and any second mortgages?
    • How much time do you have left on the loan?
  2. There are numerous reverse mortgage calculators out there on the internet.  Not all of them ask for the same information.  However, most of them will want some combination of the above information as well as the answers to the following questions.

  3. Second, what do you want from the process?
    • Do you want a lump sum up front?  Do you want money to pay for a second home, college, trip, etc.?
    • Do you want to supplement your monthly income?  Do you want a fixed amount for the next 10 or 15 years?
    • Do you want access to the equity only when you need it?  Maybe you want money to pay off unexpected expenses when they arise?
    • Do you want some combination of the above?  Yes it IS possible.
  4. Most calculators will ask for some idea of what you want.  This doesn't mean that you will be locked into your decision.  This is only an estimate from a potential lender.  These online calculators NEVER guarantee that you will get the deal.  However, they do allow you to see if it's something you wish to pursue.   
  5. Some calculators will ask for some personal contact information before you are allowed to use their calculator.  Unless you want someone calling you, you can find calculators that will give you an idea without subjecting you to various calls.  Many lenders have a reverse calculator on their home webpage.  You can also try a more generic calculator such as the one found on The National Reverse Mortgage Lenders Association -- NRMLA -- website.  They also have a list of lenders that you can choose from. 

Because of the complexities and issues with reverse mortgages, you should really speak to a professional - or several - about your specific situation.  There are far more variables to a reverse mortgage than to a traditional mortgage.  The calculator will only give you the most generic information.   By doing the appropriate research, you might find a more appropriate alternative that makes sense for your specific situation.  You might also find that the reverse mortgage makes the most sense.  The reverse mortgage calculator may at least get you started and can at least give you a rough idea of what you might get.     


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