Thinking About a Loan? Try a Reverse Mortgage Calculator

Home Equity Conversion Mortgages (HECMs) remain popular with seniors interested in making the most of their home equity during retirement. While many of the requirements necessary to qualify for an HECM are clear, others are somewhat hazy. Seniors who are interested in these loans often wonder if they have enough home equity to qualify. Others wonder how much their age will really affect their payout. A reverse mortgage calculator is a tool that can answer both of these questions. rnReverse Mortgage Calculator: Free, Commitment-Free Tool for Seniors A reverse mortgage calculator is an online tool that can be used by any senior who is interested in learning more about a reverse mortgage. These calculators are completely free to use and do not require any commitment from prospective borrowers. Seniors can simply input their information, get an estimate and walk away if they do not like what they see. For many consumers, these calculators are an easy way to measure their true interest in a loan. To use a reverse mortgage calculator, seniors input their age, state, estimated home value and any existing lien amounts. Using this information, the calculator will instantly determine whether an individual has enough equity to qualify and how much he or she might be eligible to receive with an HECM. While reverse mortgage calculators can only provide preliminary estimates, these predictions are still extremely useful. Getting an idea of how much one might qualify for often helps seniors decide whether to continue pursuing a loan or begin exploring other avenues. rnThe Next Step After Using a Reverse Mortgage Calculator Before using a reverse mortgage calculator, seniors should know that the results they receive are just a rough estimate. Reverse mortgage payouts depend on much more than just age, equity and existing lien amounts. A borrower’s interest rate, loan product, payment option and closing costs will all impact proceeds. To get a more individualized estimate, many calculators allow seniors to leave their contact information. A calculator may ask for the user’s name, address and/or e-mail address. Providing this information can open lines of communication and get more accurate quotes underway. However, offering one’s contact information does not mean that a senior has made any lasting commitment to a loan or even a specific lender. Seniors who are happy with their calculated estimates can begin communicating with a lender or seek out a reverse mortgage counselor. Attending counseling is the first real step in the loan process. During counseling, a licensed housing counselor will review a senior’s quotes, explain the loan process and discuss the ins and outs of HECMs. After completing counseling, seniors will receive a counseling certificate and may formally apply for a reverse mortgage. Once the application is submitted, it will be processed, underwritten and hopefully approved. After being approved, borrowers may set a closing date and finally receive their tax-free proceeds. While the actual loan process takes a bit longer than using a calculator, these tools are where many loans first get their start.