Reverse Mortgage Calculators as Seen on TV
Reverse mortgage calculators are all over the television and online news these days. In fact, it’s hard to browse to a site even remotely connected with finance without being bombarded with the promise of the best mortgage calculator available.
Now, there is a solid chance that you are very interested in reverse mortgage calculators – namely because you are in the enviable position of owning your own home outright. You’re most likely thinking: Just how much can I get on this type of mortgage? This is where a reverse mortgage calculator can be very helpful.
Reverse mortgage calculators are very easy to use. All you have to do is type in your date of birth, or the birth date of someone who owns the house with you. Then, you simply type in the estimated value of your home and the zip code for your home’s location. Finally, you enter in the amount remaining on the existing mortgage, if you still even have a mortgage on the property.
Upon entering in the information above, your reverse mortgage calculator will produce a calculation telling you how much money you are likely to receive. There is a solid chance that if you’ve owned your home for a long time, and you are above the age of 65, then you may receive an amount larger than you’d imagined.
One Thing TV Won’t Tell You About Reverse Mortgages
One thing you might not see as part of the calculation put forth by your mortgage calculator is the monthly service fee set aside. This is common among reverse mortgages.
This service fee can range from between $30.00 – $35.00 per month and is what the lender estimates it will cost to administer your reverse mortgage over the life of the mortgage. When your reverse mortgage closes, the service fee will be multiplied by your life expectancy (converted to months).
As an example, if at the time your mortgage closes, it’s determined that you have a good chance of you living 7 years and the service fee is $30.00, then the service fee charged would be 7 X 12 = 84 months then 84 X 30 = $2,520.00. This amount would be subtracted from the proceeds of you would receive in your reverse mortgage.
Do keep in mind also that these kinds of mortgage carry with them many of the same closing costs associated with traditional mortgages. Fees like origination fees, title search, property appraisal and an escrow account will be charged against the amount you receive from your lender at closing.
If you feel that a reverse mortgage is right for you, then using a calculator will help you get a good idea of what you might expect to receive in terms of funds. By in large, these calculators are easy to use, and will tell you how much money your reverse mortgage will make available to you. This way, you can make an educated decision about whether you should take one out on your home.