Reverse Mortage Loan, Rate and Payment Calculator
If there is one thing that senior citizens should be thankful for, it is that mortgage payment calculators or amortization calculators do not apply to reverse mortgages. That’s because you don’t have to pay monthly amortizations with a reverse mortgage. What you would need is an analyzer that can help you decide if this type of loan is right for you. As well as a calculator that can calculate how much money you will be able to borrow.
In case you didn’t know, reverse mortgages are the latest craze among senior homeowners. There are actually three types of reverse mortgages: low-cost but single-purpose reverse mortgage loans, proprietary reverse mortgages by private companies, and HECM reverse mortgages.
Of the three, the HECM reverse mortgages seem poised to debunk the belief that a house is a dead investment. A reverse mortgage loan is backed by HUD insurance. It can be used for any purpose including repairing the leaks on your roof. You can negotiate for this loan with mortgage companies, banks and other financial institutions. Each class has its own set of rate calculators or analyzers.
The cost of a reverse mortgage loan varies from one type of reverse mortgage to another; although there are online analyzers (loan calculators and rate calculators) that can help you determine the cost (amortization calculators and payment calculators do not do this). It is also difficult to do apples-to-apples comparisons between the three loan types. This is because not all of them incorporate the same costs. It is actually better if you calculate the cost based on each lender’s unique loan calculator and rate calculator.
The best way to do an analysis (read: determine best prices) is to compare the Total Annual Loan Cost (TALC) of the loans. TALC is the annual average rate of a loan, and it takes into account all of the reverse mortgage’s costs. It’s one of those loan calculators that show you that the total cost of an individual loan can vary by significant amounts. Your loan might turn out to be more expensive than it actually is. It is easy to find a calculator like this on the internet.
Through the use of a loan calculator, you will find out that reverse mortgages are more expensive a few years after closing the loan. Start-up costs comprise a large chunk of the total amount you owe to a reverse mortgage company. The TALC rate declines further on. As the loan balance grows, the start-up costs are reduced.
The TALC is only one indicator of a reverse mortgage’s true costs. So far, HECM reverse mortgages are the most popular of the three types of reverse mortgage loans. This can be attributed to the lingering perception that it costs less than the proprietary private programs. It is also more flexible in use than the single-purpose reverse mortgage loans.
HECM reverse mortgage rate calculators are designed so that the loan can never cost more than your home’s market value. A downside to HECM reverse mortgages is that it is catered specifically to seniors who are at least 62 years old. Middle-aged homeowners will not benefit from them. Only amortization calculators and payment calculators will be useful in this case.
The good thing about reverse mortgages in general is that you still get to keep your home even when you’re in debt. The loan is only repaid if the owner dies or permanently moves out of the house. There certainly is no need for amortization calculators or payment calculators in this case. To continue calculate your specific case please use our online reverse mortgage calculator.