Is a Reverse Mortgage Right for Me?             

For many seniors whose home is their largest asset, the benefit of taking out a reverse mortgage, could provide homeowners with a sort of cash advance payment on the equity in their home. There are many households entering retirement that may not have sufficient resources to maintain a standard of living and pay unexpected costs, but before you rush to take out a reverse mortgage, it’s important to understand the potential upsides and downsides of the program.

Advantages of using a reverse mortgage

  • Borrower’s can use a portion of their home’s equity while continuing to own and live in the home.
  • Borrower’s do not have to repay the loan if they live the house, are current on taxes and insurance, and manage home improvement repairs.
  • The borrower or heirs will never have to repay more than the value of the loan, even if the home value drops. If the sale of the home isn’t enough to pay off the reverse mortgage, the lender must take a loss and request reimbursement through the FHA.
  • Borrower’s can access additional funds to remodel their home, pay off their current mortgage, improve their quality of life, pay off high interest debt, or pay for every day expenses.
  • The reverse mortgage line of credit is a great safety net option, thanks to its unique growth ability and its guaranteed feature of growth-without withdrawals. This feature allows you to lock in the current value of your home and low interest rates and see your assets grow, even if home prices fall.
  • You will not lose your Social Security or Medicare benefits

Disadvantages of using a reverse mortgage

  • A reverse mortgage can have higher closing costs and interest rates than a traditional mortgage.
  • Interest is added to the outstanding balance every month, and any cash a homeowner receives reduces his or her equity in the house. As a result, the equity in the home may be reduced or even used up. This means heirs planning on inheriting the property may be in for a surprise.
  • The loan cannot be assumed by a family member, so a reverse mortgage may be a poor choice for families living in a multigenerational home.
  • One requirement of a reverse mortgage is that you live in the home. If you have to move – always a risk given unplanned health certainties that come with age – the loan will become due.

Working with the Calculator

With our free reverse mortgage loan calculator, no personal contact information is collected. Just respond to the questions above to get an estimate of the total proceeds you may receive from a reverse mortgage.

How do Reverse Mortgage Loan Calculators Work?

Our reverse mortgage loan calculator works by determining your eligibility and the amount you may qualify for based on several factors such as your home value, any existing mortgage balance, and your age.

Additional Calculator details

  • The Loan Estimate is the amount you may be eligible to receive, before fees, based on your home’s value, your age and HUD’s principal limit factor. Senior borrowers must be 62 years of age or older to be approved for an FHA-insured Home Equity Conversion Mortgage (HECM).
  • You may elect to take your reverse mortgage payout in lump sum payments, monthly installments, a line of credit, or a combination of these.
  • HECM loans have a loan limit of $679,650, therefore you may notice that home values above $679,650 do not increase the loan estimate amount shown on our calculator. Pacific First Financial Real Estate loans, Inc is one of few Mortgage Brokers to offer JUMBO reverse mortgage loans, available from $625,000 up to $6 million. A Pacific First Financial Real Estate Loan, Inc reverse mortgage professional can provide you an individualized consultation based on your particular situation and retirement goals.
  • As a homeowner, the equity in your home should be greater than your remaining mortgage balance. This is because your reverse mortgage funds will be used to pay off your existing mortgage as part of the transaction.

Disclaimer: Tools and advice provided on this page are for borrower convenience, the results of calculations using this calculator are loan estimates, and terms produced by the calculator may not be presently available credit terms. Interest rates (fixed rate and adjustable rate, LIBOR index) and amortization, mortgage insurance premiums (MIP), origination fees, lender margins, payment options and closing costs may vary. In order to be eligible to apply for a reverse mortgage, one of the requirements to fulfill is to attend a counseling session with a counseling agency that is approved by the U.S. Department of Housing and Urban Development (HUD). Borrowers must continue to pay taxes, insurance, and home maintenance, as well as comply with loan terms. Pacific First Financial Real Estate Loans, Inc. is Licensed by the California Department of Real Estate - Real Estate Broker - CA DRE Corporation ID: 01131611, NMLS Company ID: 328527, and is not acting on behalf of or at the direction of HUD/FHA or the Federal Government.                                                                               

Reverse mortgage calculation provided by ReverseVision