How A Reverse Mortgage Calculator Can Help You
Doug Smith

Defined Tag: Reverse Mortgage Calculator.

A reverse mortgage calculator is not an electronic gadget with a numeric keypad. Rather, it is the online equivalent of such a device. It is a web page designed to let you calculate how much you can earn for a reverse mortgage, based on answering some simple questions. Simply fill out the fields on the form, click the calculate or submit button, and the calculator can estimate how much a reversed mortgage can pay you.

As you recall, a reverse mortgage is an income stream for senior citizens aged 62 or older. They can essentially sell their house back to the bank, and the bank will pay them monthly payments. These payments are actually a loan, which is repaid when the house is sold after the death or moving of the homeowner. This can assure a steady and reliable source of retirement income in the event that the 401(K), Social Security, Medicare, Individual Retirement Account (IRA) or other income are not enough. These online reversed mortgage calculation websites can estimate how much this financial tactic might pay you if you take advantage of it.

The AARP (American Association of Retired Persons) website has one of the most frequently used calculators for these home reversion mortgages. It asks a few easy questions, then sends you to a results page after calculating what your monthly payments, or lump sum payment, or line of credit might be. You will need to know the current value of your home, which you can estimate from other homes in your area, or an appraisal, or as listed on your real estate tax statement. The mortgage rates will vary by area, so your zip code will be needed. You will have to tell the calculator your age and your spouse's age, if married.

Most online reverse equity calculators will ask for similar input data. The nice thing about these online calculational forms is that you can adjust the parameters and quickly see how your payments vary based on the change. You can determine whether your home's appraised value or the value on your property tax statement will get you more value for your home equity release. If the calculated monthly payments are too low, perhaps the lump-sum option will help you financially. Sometimes it is possible to be paid with a combination of a lump sum plus monthly payments.

Reverse mortgages are not well known in some areas of the country. Find a reliable loan broker before taking any big financial steps, and use a reverse mortgage calculator to determine if selling your house to the bank (while you still keep living in it!) makes financial sense for you.

Copyright 2008 by Doug Smith. All Rights Reserved Worldwide. Unauthorized Duplication Prohibited.