Though by no means a definitive answer, a reverse mortgage calculator can give you a pretty good idea as to how much money you could unlock from your home. What follows is a brief explanation of how they work and which ones are reliable.
A reverse mortgage calculator is a pretty sophisticated tool that can work out how much money a senior can expect to get when they take out this type of loan. The software uses the same criteria as any broker would use. The parameters used in making the calculation are the location of your home, its value, the amount of mortgage still owing, the mortgage payments, current interest rates and the birth dates of the borrower and co-borrower (should there be one).
Basically, the more equity in the home and the greater your age the more that you’ll be able to borrow. Location is important as the HECM reverse mortgage program has ceilings on the amount that can be loaned and these vary by county – rural areas Age calculator typically receiving less than urban areas. The current maximum amount varies from $200,160 to $362,790. Proprietary programs care less about location and are primarily concerned about equity value and age of the borrower.
This brings us to another point about what reverse mortgage calculator you use. All will give you the amount you can borrow against either a HECM or Home Keeper program as these are nationwide, government-backed programs. However, when using a calculator on a website of a proprietary program lender, the third amount displayed will be for its own product. You won’t get figures for all available proprietary programs, which makes sense as each company will have its own way of determining how much they would be willing to lend you.
The following are some of the largest proprietary program available today – each has its own calculator.
Financial Freedom offers a product called Cash Account Advantage.
Wells Fargo does not have its own product but is an authorized agent for Financial Freedom.
Generation Mortgage offers a program called Generation Plus.
Bank of America offers the Independence Plan.
Countrywide offers the Simple Equity program.
BNY offers two: Prime Advantage Fixed Rate Reverse Mortgage and the Prime Advantage Adjustable Rate Mortgage.
If you’re only interested in getting a HECM or Home Keeper then the best reverse mortgage calculator to use is either the AARP or National Reverse Mortgage Lenders Association (NRMLA) found on each organization’s website. Both give very accurate estimates and the illustrative amounts are identical no matter which one you use. Also the figures shown, breakdown the different payment options you can receive; lump sum, line of credit or fixed monthly payments.
The calculators for the jumbo programs will also illustrate the amounts you could receive for both the HECM and Home Keeper programs, but I have found these to be slightly less accurate. However, you would really only use these calculators for determining the amount you’d receive for a jumbo loan.
Of the jumbo loan calculators, the Financial Freedom is the most widely available on the net, which isn’t too surprising as it’s the most popular jumbo program on the market today.
Finally, you should only use a reverse mortgage calculator to give you an indication of how much you’d receive. For accurate figures, you need to speak to a local broker.