Reverse Mortgage is a loan available for homeowners who are of 62 years of age and above. This loan allows them to convert part of their home equity into cash. This loan was created to help retired people with limited income.

The best loan provides best reverse mortgage which can be calculated on line. The borrower does not have to pay back the loan until the home is sold or vacated. As long as the borrower lives they are not required to make any monthly payments towards the loan. The borrower has to remain up to date on property taxes, homeowners’ insurance and homeowners’ association dues (if applicable).

The reverse term is misleading as it is line of credit based on the equity of your home which a lender pays to you. You are paid for your home without leaving it. You can draw the line of credit whenever you want and you don’t have to make any payments. You pay when you sell your home or the home is sold after you die.

There are various types of mortgages like the single purpose reverse mortgage and is used for paying property taxes and for home repairs. Vast number of mortgages are issued at Home Equity Conversion Mortgage which is based on the value of the home you need to calculate the reverse mortgage.

Some may allow you to draw the line of credit but others may fix monthly payments for a period of time or until you die. Monthly payments are not taxable.

Many may like to get money on their equity n their home but they may not like the fact that they will not be able to leave the home for their heirs. There are other investment methods where you can save for your retirement and also own your home free. Stocks, bonds, 40t1[K] account, mutual fund, IRA, Roth IRA, fixed and variable annuities. For these you have to make continuous and consistent contributions for years.

• To calculate reverse mortgage in the #1 reverse mortgage calculator, you need to put inputs such as your home’s appraised value which is compared to $625,500 FHA lending limit to determine the HECM eligible amount (the eligible amount is less).
• The other input required in the #1 reverse mortgage calculator is the current 10-year LIBOR Swap Rate (automatically updated) and Lender’s Margin, both together make up the expected rate.
• The next input is the age of youngest eligible spouse (non-borrowing). The four inputs so far are used to calculate the principal limit factor.
• Next inputs usually required in the #1 reverse mortgage calculator are the loan origination fee and closing costs, both are combined for the predetermined cost of the initial mortgage insurance which determines the total loan cost.
• The seventh input is the percentage of costs to finance by the loan upfront. This should be 0% if the cost is financed from other resources, 100% if fully financed by the loan.
• The final input is the Life-Expectancy Set-Aside requirements (LESA) that is determined as part of the financial assessment for borrowers. The information about costs and set-asides is applied to the home value and PLF to calculate the available HECM.

The #1 reverse mortgage calculator provides the net amounts available as tenure or term payments. The term payment is calculated for a fixed term, if the needs to be extend beyond age 100, the term payment is automatically adjusted to a higher value of the tenure payment. Tenure and term payments are provided as monthly and annual values. The tenure payment is represented as a payout rate which is based on a percentage of the net principal limit plus financed costs.

Here are the Loan Options:

Adjustable Rate HECM

The Adjustable Rate HECM provides financial flexibility. It can be used for receive loan proceeds from a line of credit, monthly disbursements, lump sum or a combination of the three. Using these proceed you can delay other retirement benefits and investments, allowing them time to increase their value.

You are not required to take any money when you start your line of credit. The amount of available funds grows over time, giving you more money in the future.

Fixed Rate HECM

The Fixed Rate HECM disburses money as a lump sum and locks the interest rate at the time of closing. The interest rate remains the same for the duration of the loan. This loan is often used to pay off mortgage balance, property taxes, medical bills, and home repairs. It is also used to pay for living expenses so your other investments grow in worth.

HECM for Purchase

You can purchase a new home. With reverse mortgage, you are not required to repay the loan until it is due and payable. It becomes due and payable if you move, sell the property, or pass away. You remain the owner and you must continue to pay property taxes, insurance fees, and home maintenance costs.

Many people use this #1 reverse mortgage calculator to buy closer to the family, a warmer climate, or that suits their physical needs.

The down payment is determined by the youngest borrower/eligible non-borrowing spouse. The older that person the less the borrower y needs to put down.