Reverse Equity Mortgage Rate Calculator

Reverse Equity Mortgage

You may have heard of reverse equity loans referred to simply as reverse mortgages. A reverse equity mortgage is one way for people aged 62 and older to obtain money from their investment. There are three different types of reverse mortgages that individuals may qualify for. They include the following:

• Lender insured
• Uninsured
• FHA insured

Each of these three types of reverse mortgages has pros and cons, including varying interest rates. Depending on what your needs are, a reverse mortgage can give you financial independence to do the things you would really like to do. How you use the money from a reverse mortgage is completely up to you.

Reverse Mortgage Interest Rates

If you are considering a reverse mortgage, it is a good idea to thoroughly research your options. One of the most important things to look at is the interest rate since it can easily deplete the amount of money that is available to the customer. The higher the interest rate, the lower the monthly payout will be and the quicker the loan amount will be depleted.

• Lender Insured Rates. A lender insured reverse equity mortgage uses fixed or adjustable interest rates. It is also important to note that the insurance premium may either be fixed or variable as well.
• FHA Insured Rates. FHA insured reverse mortgages also utilize either fixed or adjustable interest rates.
• Uninsured Rates. Uninsured reverse mortgage rates are usually fixed, so searching for the lowest interest rate will pay off in the long run.

Mortgage Payments

When calculating the total amount of the payout for a reverse equity mortgage it is important to take the following into consideration:

• Interest rate at time of the mortgage
• Insurance premium
• Closing costs

It is important to note that not all reverse mortgages have an insurance premium built into them. Both the lender insured and FHA insured mortgages require insurance premiums on their mortgages. Uninsured reverse mortgages do not require an insurance premium as these loans require repayment at the end of the loan.

Using a Reverse Equity Mortgage Rate Calculator

A reverse equity mortgage rate calculator allows you to figure out how much interest you will pay on any mortgage. There are many rate calculators available on the Internet and you can find out current rates, as well as receive offers, from a variety of lenders.

Popular places to find reverse equity mortgage rate calculators include:

• Financial Freedom is the largest reverse equity mortgage lender in the United States.
• AARP offers a simple calculator in addition to reliable and unbiased advice to potential applicants.
• The Wells Fargo website offers a reverse equity mortgage rate calculator from a reputable lender.

A rate calculator can help you determine what your payout will be on a mortgage. The calculator takes into consideration the amount of the loan, associated costs such as insurance premiums and closing costs, and current interest rates to help you determine what your monthly payout will be.

Information Needed

Before filling out the calculator you will want to be sure to have the following information handy in order to receive an accurate estimate:

• Your birth date and the birth date of your spouse
• The approximate value of your home
• Your zip code

An online calculator is merely a tool furnished by lenders and other sources so you can make a more informed decision about getting a reverse equity mortgage. Submitting your information to an online calculator does not submit a loan application, nor does it indicate any approval of a loan from the lender.

Conclusion

Interest rates have a direct bearing on the total amount of your reverse mortgage. Consumers should shop for the best rates possible before obtaining one of these loans. Borrowers should be aware that the amount they receive each month from a reverse mortgage could be considerably less if the current interest rate is high. It is also important to note that whether a mortgage rate is fixed or adjustable can have an impact on the total amount of the mortgage.

Borrowers should always speak with a certified reverse mortgage loan counselor before they apply for a reverse equity mortgage.