Reverse mortgages are complex financial instruments. It's important that you know exactly how much of your equity you can tap, as well as what the costs will be to access it. These three calculators will help to put those numbers into perspective.
National Reverse Mortgage Lenders Association (NRMLA)
This NRMLA calculator may be the most credible of all the reverse mortgage calculators, in that it is the one linked to by the Federal Government. It provides extensive detail of the fees and interest rates associated with your reverse equity mortgage, including mortgage insurance, interest rates, the origination fee, and other closing costs.
This calculator is used exclusively for Home Equity Conversion Mortgages (HECM). This is a specific type of reverse mortgage, approved and insured by the Federal Housing Administration (FHA).
If, for example, you are 63 years of age, own a home valued at $175,000, with $5,000 still owing on your mortgage, the payout you could receive under the fixed rate option is $92,925, less closing costs totaling $6,883.
Another feature of this website is that you can search for member lenders in your area, all of whom have signed NRMLA's Code of Conduct and Professional Responsibility. Email addresses and telephone numbers are provided for each lender.
SunWest
SunWest Mortgage Company provides a calculator that outlines for different scenarios. They offer a fixed rate option with a close or open end, as well as a variable rate, and an annually adjustable rate.
This calculator does not itemize all the fees and calculations. Instead, it automatically subtracts those amounts from the payout it displays. This means that you wouldn't have to pay any cash at closing.
Using the same information as in the NRMLA example, you would be eligible for a payout of $44,368 under the fixed rate close end option.
Liberty Reverse Mortgage
Liberty specializes in HECMs and has served more than 35,000 senior citizens. The company also earned an A+ rating of the Better Business Bureau.
Using this calculator is a two-step process. The first step determines whether you are eligible for an HECM. Assuming that you are, the second step requires you to provide an accurate name address and telephone number. Only after you provide that information will the calculator display a quote.
Proceed With Caution
As you can see from these examples, keying in the same borrower information yields broad-ranging results. Interest rates and fees charged by different loan providers are likely two components contributing to the disparities, but there may be others.
It is wise to speak with a certified reverse mortgage loan counselor, an AARP representative, or other trusted financial professional before applying for a reverse equity mortgage. These calculators are good tools to have as you begin to explore the world of reverse mortgages, but they are no substitute for due diligence.
