Reverse Mortgage Calculator: A Good Place To Start

2/25/2008

posted by N. Sioris

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Using a reverse mortgage calculator can be a very easy and useful tool to use, if you are trying to quickly find out if you have enough equity in your home to qualify for a reverse mortgage loan.

If you are just starting your investigation into how these loans work and whether one might be right for you, using a reverse mortgage calculator is a good first step to take. It will quickly give you a snapshot into whether you qualify for a reverse mortgage. The reverse mortgage calculator will tell you approximately how large a loan amount you qualify for.

If you do not have enough equity in your property to qualify today, the calculator results will illustrate how much of a shortfall you might have. If the shortfall is not a huge amount, you may decide that it is worth it to you to liquidate another asset in order to be able to qualify for the reverse mortgage. In a situation like this, the benefit of being able to eliminate your current mortgage payments all together might be a big enough incentive for you to contribute funds in order to get the loan. By doing this your may be gaining the long term peace of mind of knowing that your house payments have been eliminated forever and that you will have no future mortgage payments for as long as you live in your home.

You can also use a reverse mortgage calculator to run "what if" scenarios as well. You can input different property values, different mortgage balances, and different ages. By doing this you will be able to get an estimate of when you may be able to qualify for a reverse mortgage in the future if you do not have enough equity in your property today. As you pay down your current mortgage, and you have another birthday or two, and possibly your property appreciates a little more, you will see that the results will come closer together and you will eventually be able to qualify for a reverse mortgage.

A reverse mortgage calculator is strictly an estimate and should not be used as an offer to make you a loan or a commitment that this exact loan amount will be offered. Reverse mortgage loans are subject to an appraisal report, a review of your title to determine all existing liens, if any, and the current interest rates at the time you apply for a reverse mortgage loan. But generally speaking, a reverse mortgage calculator is an excellent place to start in order to get a ballpark idea of what you may be able to get if you decide to apply for a reverse mortgage. The calculator also provides you with results for 2 or 3 different types of reverse mortgages and makes a comparison between the loan amounts and interest rates for the various choices.

To learn more about a reverse mortgage calculator and to use this handy tool, click here.