What A Reverse Mortgage Calculator Won t Tell You

While a free reverse mortgage calculator might be able to give you an idea of how much you could borrow, none will be able to tell you something that is far more important, and that is how much equity will be left in your home after a period of years. It s crucial you are aware of this before you make any decision on whether to opt for this type of loan. There are a number of calculators to be found online.

However, you may find that the amounts illustrated differ from one website to another, even when the same dates and amounts are entered. If you are going to opt for either a Fannie Mae or FHA reverse mortgage, then the best (and free) reverse mortgage calculator can be found at either the AARP or National Reverse Mortgage Lenders Association (NRMLA) websites.

Both are accurate, display identical figures and display most of the crucial information, such as how much you d receive as a fixed monthly payment, a line of credit (and how much that line of credit would appreciate over 5 and 10 years for the FHA program) or how much you d receive as a one-off lump sum. But, if you opt for a jumbo program, you ll need to use that company s proprietary calculator.

These calculators also give you the FHA and Fannie amounts though they tend to be slightly less accurate. The Financial Freedom calculator is the most widespread. A reverse mortgage calculator works by using the equity value of your home, its location, your age (and partners), and current interest rates. It then performs the calculation and gives you an indicative illustration of what you d receive. What it won t tell you is how much equity would be left in your home after a number of years.