Reverse mortgages calculators are a relatively new method of getting more money to help with the improvement of the home, improvement of finances, and even paying off bills and even helping pay off the existing mortgages on your home. Generally, reverse mortgages are only for those that are 62 or older. This option is best for those seniors that want a bit of extra money without taking on a new mortgage or loan payment each month. In order to better understand who qualifies and who is best suited for a reverse mortgage it is important to first understand what a reverse mortgage is.
In essence, a reverse mortgage is a loan that allows homeowners to get money for the equity in their home. This can be up to tens of thousands of dollars depending on how much the home is worth, how many improvements have been done, and how much money the items and improvements in the home are worth. This type of loan is best for those seniors that either have their home paid for or that have a low payment each month. Though you do not take on more payments with a reverse mortgage, you do end up putting the estate in a bind either when you move, go to a retirement community, or pass away. The funds that are garnered from a reverse mortgage are not paid back to the lender until one of three things happens, first the homeowner may transfer ownership of the home to a third party, when the homeowner moves the money is paid back out of the selling cost.
Second, if the homeowner moves out of the home into a retirement community or into the home of a relative it is also paid back to the lender. Lastly, if the homeowner passes away the money that was given to them through the reverse mortgage is paid back to the lender from the funds that are gained through the sale of the house. In the immediate future, a reverse mortgage is perfect for those that need a bit of extra money and that do not need another mortgage on their home. In the long term this may not be the best if the home does not sell for the amount of money that was borrowed against it, if the estate cannot settle after the homeowner has passed, or if the home is worth less than the amount that was borrowed against it.
Just like there are mortgage calculators, there are also reverse mortgage calculator that can help seniors determine how much their home equity may be worth in terms of a reverse mortgage. There are a few different options when it comes to reverse mortgages, the first is of course those federally funded and insured mortgages that are given to seniors. These are a bit easier to get and they are always backed by the federal government. Another type are those that are funded through private organizations. These are a bit easier to get than those that are funded through the government but there may be harsher stipulations with this type of loan.
Understanding the reverse mortgage calculation with these two types of mortgage can help demystify the process. There are also several options when it comes to the payment of the funds. The first are monthly checks. This is helpful for those that need another income and do not want a lump sum of money to deal with. This is great for those that want a smaller monthly income. The second option is annual payments, this means a larger lump sum each year to help with the fixes around the home and with payments that may be needed as long as the individual lives in the home. The last is a line of credit that can be used through the duration of the home ownership and until the line of credit has been fully used up. This is best for those that have large improvements that they may need large amounts of funds for.