A Guide to Using a Reverse Mortgage Calculator

Can Home Equity Conversion Calculators Help Make the Right Decision?

Oct 26, 2009

Those looking to use home equity conversion products to release cash from their homes may find a reverse mortgage calculator useful. What can these tools show?

Consumers over the age of 62 can consider using a reverse mortgage to release cash from their property without having to sell up and move. These products allow them to tap into their paper assets to raise cash without generally having to pay for their borrowing until they move out, sell their home or die. As part of the process some will use a reverse mortgage calculator. What can these tools tell the individual?

What Can Reverse Mortgage Calculators do?

An individual may have a pretty good idea whether they will qualify for a reverse mortgage or not, but they may not have a clear idea of how much money they can raise this way. These calculators may not give hard and fast borrowing amounts, but they may give the individual an idea of how much they are likely to be able to borrow.

This can be a useful part of the process during its planning stages. This need not be time consuming as the majority of calculators can provide estimates online, free of charge, in just a few seconds or minutes once they have assessed the answers to certain questions.

What Questions do Reverse Mortgage Calculators Ask?

These tools may not all ask exactly the same questions or expect exactly the same information to be inputted into their calculation fields. Generally, however, they will ask the following types of questions:

In some cases the calculator may ask some more detailed questions such as whether there are any outstanding mortgages or loans on the property and what kind of borrowing the individual is looking for.

Things to Remember With a Reverse Mortgage Calculator

Consumers should remember that these tools are used to give estimates only and, as such, they can be useful for those who want to see what their options may be. These may not be the same figures that might be offered if the individual decides to apply for one of these loans. Plus, knowing how much might be raised this way doesn't mean that this is a feasible solution.

It may be wise to get counseling and to think about the pros and cons of the reverse mortgage before deciding to apply for this kind of product. This can be a great way of accessing cash for some, but may not suit every individual. These calculation tools can play a useful part but further research and thought will still be required.

The copyright of the article A Guide to Using a Reverse Mortgage Calculator in Mortgages/Loans is owned by Carol Finch. Permission to republish A Guide to Using a Reverse Mortgage Calculator in print or online must be granted by the author in writing.