# Reverse Mortgage Calculator

A reverse mortgage is a loan secured by the existing property which a person owns for a fixed tenure. This is mainly for the senior citizens.

A reverse mortgage calculator helps the borrower’s to know the money available to them and how much the mortgage type would cost.

The reverse mortgage calculator considers four factors:

• The age of the borrower
• Interest rate
• The market value of the property
• Current mortgage balance

Example:

If a person of age 66 takes a reverse mortgage loan with a desired loan of credit \$50,000 whose house worth is \$300,000 with no other mortgage liens then the amount which he gets is
A single lump sum advance of \$145,166 monthly \$167,547 Fixed HECM   \$91,504 HUD HECM 1 year

#### LIBOR Annually

Or a line of credit money of \$145,166 monthly \$91,504 1 year LIBOR annually

That grows each year 3.83% HUD HECM 1 month LIBOR monthly 7.74% HUD HECM 1 year LIBOR annually

If not used the available credit

For 5 years will be   \$175,178 1 month LIBOR monthly      \$132,842 1 year LIBOR annually
For 10 years will be \$211,395 1 month LIBOR monthly      \$192,854 1 year LIBOR annually

Or a monthly loan advance for the period the person stays in the house \$1031  1 month LIBOR monthly \$835 1 year LIBOR annually

#### Check Points:

If a person owes any amount of money as debt on the home, and does not repay before obtaining reverse mortgage then the amount owed should be taken as an advance to repay the debt. This will reduce the amount obtainable in a single lump sum, credit line or monthly advance. A person is not suitable to get reverse mortgage if he cannot pay the debt over the home at closing.

In the sense, if a person owed \$20,000 on a mortgage or home equity loan does not repay it before closing the reverse mortgage, then this amount can be taken at the time of closing the reverse mortgage and repay the debt. If the person qualifies for more than \$20,000 then the rest of the amount can be taken at closing or leave it in a credit line or take it as monthly advance.