A reverse mortgage is a loan against the equity in your house. If you came looking for a reverse mortgage calculator you are likely trying to determine the loan amount you canreceive against the equity in your home.
Below we will help you determine your potential benefit. Interest rates are subject to change and the numbers below may omit important information about your situation so we highly recommend you speak to a reverse mortgage lender for more specific reverse loan details.
Let’s start the analysis by establishing the basic reverse mortgage requirements:
The home must be your principal residence.
Both homeowners (if two people on the deed) must be 62 years or older.
Your income or credit score are not considered.
A large amount of home equity is required. Younger you are the more equity you need.
FHA approved counseling class is required to ensure you understand the reverse mortgage.
Home appraisal is required.
The maximum loan limit is different for each county but can not exceed $625,000.
Loan proceeds are not subject to income tax.
A reverse mortgage is a lien. You retain ownership of the home. No monthly loan payments are required but you must continue to pay property taxes and insurance.
A reverse mortgage can be taken as a line of credit, lump sum, or monthly payments.
A line of credit has the most money available. A lump sum you receive all of the money up front, so the fees are higher. Once you have the money there are no restrictions and you can spend or invest the money as you wish.
The older borrower requires less home equity. Home equity is determined as the home value minus all existing mortgage amount. Based on today’s rates here are a few approximate examples.
A 62 year old borrow requires at least 46% equity in their home
A 72 year old borrow requires 39% equity.
An 82 year old borrower requires 32% equity.
These numbers can vary based on the rates and the loan type you select.
You have now determined the basic requirements and if you could potentially qualify. You can use the calculator below for more specific numbers. These are estimates, please contact a reverse mortgage lender for specific numbers.
After entering your information you should receive your reverse calculator results. The results are given for the HECM Libor and HECM Saver products.
The upfront lump sum is an approximation of the amount that you could receive in a reverse mortgage loan. Please fill out the form at the top of this page to speak to a lender and have the numbers explained to you and determine your benefit.