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Reverse Mortgage Calculator

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Reverse Mortgage Calculator
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In your current area 100 homeowners are currently utilizing reverse mortgages to better enhance their retirement years, with 500,000 nationwide!

The amount you receive is based on your home’s value, your age, and current interest rates. Let’s start with your address so I can estimate your home value…
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Great! It looks like your home value estimate is about

If you feel this estimate is not correct you can manually change it below. If you have an existing mortgage balance, I'll need to know the amount we are going to pay off to get rid of that mortgage payment!

Please provide your estimated home value

If you presently have an existing mortgage balance, I'll need to know the amount we are going to pay off to get rid of that mortgage payment!
(Our calculations use estimated property values provided by Estated.com. An independent HUD-approved appraiser must complete an appraisal to finalize your loan)
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The minimum qualifying age for a reverse mortgage is 55

Don’t forget to include your spouse’s age, even if they are not yet 55, as loan proceeds are always based on the age of the youngest spouse.
Your Age
Spouse Age
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Great News! Your ARLO analysis is ready

Your personalized results include the best of 2024's reverse mortgages
  • Side-by-side loan comparisons
  • Real-time interest rates
  • ARLO™ advice to help you select the right program
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Your FREE Report Includes:
  • Real Time Analysis  (Next Step)
  • Analysis Via Email
Example ARLO Quote
From America's #1 Rated Reverse Mortgage Lender

Welcome to ARLO™ Reverse Mortgage Calculator!

Get ready to make informed decisions about your reverse mortgage with the ARLO™ Reverse Mortgage Calculator.  Your personalized results will provide a variety of helpful information, including side-by-side comparisons of different loan options, real-time interest rates and annual percentage rates (APR), estimates of closing costs, and tailored program recommendations.

Key Features of the ARLO™ Calculator

  • No Personal Details Required: Start your calculation without entering personal information.
  • Real-Time Rates: Stay updated with the most accurate rates and APR.
  • Detailed Comparisons: Compare various reverse mortgage plans side-by-side. ARLO™ highlights key differences to help you choose the best fit.
  • Interactive Experience: Follow guided steps to find the optimal program tailored to your needs.

How to Use the ARLO™ Reverse Mortgage Calculator

  1. Input Zip Code: Start by entering your zip code.
  2. Home Value Estimation: Provide an estimated home value to calculate potential loan amounts.
  3. Age of Youngest Borrower: Enter the age of the youngest borrower to determine the maximum loan amount available.
  4. Current Home Equity: Add your current mortgage balance to refine your estimated available reverse mortgage proceeds.

Your Reverse Mortgage Estimate Explained

  • Estimated Loan Amounts: View potential loan amounts based on your details.
  • Real-Time Interest Rates and APR: Access the most current rates.
  • Estimated Closing Costs: Get upfront estimates to better plan your finances.
  • Amortization Details: View detailed amortization schedules, showing how your loan balance and home equity might change over time.

 

3 Calculator Tips

Tips for Using the ARLO™ Reverse Mortgage Calculator

  • Spouse’s Age: Including your spouse’s age, even if under 62, can affect the calculation by reflecting the longevity risk considered by lenders.
  • Timing Your Application: Applying close to your birthday might increase the loan amount you qualify for due to changes in principal limit factors.
  • Inclusive of All Liabilities: Ensure all existing mortgage balances, including HELOCs, are included for an accurate assessment of available funds.

 

 

Calculator FAQs

Q.

How is the amount of a reverse mortgage determined?

A reverse mortgage calculator uses several key factors to determine the loan amount: the borrower’s age, the home’s value (or the HUD lending limit if it’s lower), and current interest rates.  The Department of Housing and Urban Development (HUD) provides a table called the Principal Limit Factors, which sets the loan-to-value ratio based on the expected interest rate.  This ratio is applied to the lower of the home’s value or the HUD lending limit to calculate the total loan amount available, known as the Principal Limit.  This calculation helps homeowners estimate the amount they can receive, aiding informed financial decisions.

Q.

How do interest rates impact the calculation of a reverse mortgage?

Interest rates play a crucial role in determining the loan amount a borrower can receive.  The Department of Housing and Urban Development (HUD) sets a baseline interest rate called the “Floor rate,” currently at 3%.  If the expected interest rate is at or below this floor, borrowers are eligible for the maximum loan amount based on their age and property value.  However, the loan amount decreases if the expected rate exceeds this floor.  Higher interest rates reduce the available funds to the borrower, significantly affecting the financial benefits of a reverse mortgage.

Q.

How is the growth rate for a HECM line of credit calculated?

 The growth rate for a HECM line of credit increases the available funds over time.  It is calculated by adding the current interest rate to the mortgage insurance premium rate, currently 0.50%.  This combined rate is recalculated each month based on the remaining unused balance.  For example, if you have $75,000 unused in your line of credit and the interest rate is 4%, the total growth rate would be 4.5%.  This means your line of credit would grow by $281.25 for that month, calculated by applying the annual growth rate of 4.5% to the $75,000 and dividing by 12.

Q.

How are monthly payments calculated on a reverse mortgage?

Monthly payments on a reverse mortgage depend on several factors: the total loan amount, the age and life expectancy of the youngest borrower, the current interest rate, and the length of the chosen payment plan.  Borrowers can choose a “Tenure” plan for guaranteed monthly payments for life as long as they live in the home and keep the loan active.  Alternatively, a “Term” plan specifies a set period, such as 15 years, after which no further payments will be made.  Generally, the older the borrower, the higher the monthly payments.  Longer payment periods result in smaller monthly amounts.  Consult with a lender for specific monthly payment calculations based on your circumstances.

Q.

How is the lump sum payment calculated for a reverse mortgage?

HUD guidelines determine the lump sum amount for a reverse mortgage.  It includes covering all mandatory obligations like closing costs and existing debts against the property, plus an extra 10% of the Principal Limit or 60% of the Principal Limit—whichever is greater.  For example, if a borrower’s Principal Limit is $100,000 with no liens and $7,000 in closing costs, they could receive a lump sum of $53,000 after calculating a starting loan balance of $60,000 (60% of the Principal Limit).  If an outstanding mortgage is $75,000, the maximum starting loan balance would be $92,000.  The availability of any funds beyond the initial amount depends on the loan type: a fixed-rate loan offers a one-time lump sum at closing, while an adjustable-rate loan places any excess into a line of credit, accessible after 12 months.

 

Guide to Choosing the Right Reverse Mortgage Calculator

Type of CalculatorPurposeFeaturesRates/APR
All Reverse Mortgage CalculatorDetailed Calculations for Monthly Payments, Single Lump-Sum Disbursement, and Line of Credit OptionsCalculation of What You Could Get from a Home Equity Conversion Mortgage (HECM) or Jumbo/Proprietary Reverse MortgagesYes
Free Reverse Mortgage CalculatorBasic Calculations for Estimating Monthly Payments, Single Lump-Sum Payouts, and Available Line of CreditQuickly Estimate Your Reverse Mortgage Payout Without Personal Details.No
Reverse Mortgage Line of Credit CalculatorSpecialized Tool for Estimating HECM Line of Credit and Simulating Credit Line Growth RatesEstimates Your Available Credit Line from a Reverse Mortgage and Projects Its Growth Over Time.No
Reverse Mortgage Refinance CalculatorHECM to HECM Refinance AnalysisAssists in Evaluating Whether Refinancing Your Existing Reverse Mortgage is Advantageous, Considering Current Home Value, Interest Rates, and the 5x Benefit Rule.No
Reverse Mortgage for Purchase CalculatorHECM for Purchase Calculates the Funds Needed to Buy a New Home with a Reverse Mortgage, Taking into Account Your Down Payment and Net Income from the Sale of Your Current Home.Yes
Reverse Mortgage Amortization CalculatorLoan Balance and Equity Simulator, Negative Amortization SchedulesOffers a Comprehensive Analysis of Loan Balance, Equity, and Accrued Interest Changes Throughout the Life of a Reverse Mortgage, Complete with an Excel File for Personal Tracking.Yes
This chart outlines the variety of calculators from All Reverse Mortgage, tailored to your needs for reverse mortgages. It's arranged with four easy-to-understand sections: the type of calculator, its purpose, its features, and information on whether it includes rates and APR details.

Do you need assistance or have any questions about which calculator to use? Don't hesitate to reach out to us. Our expert team is just a phone call away at (800) 565-1722, ready to offer you tailored advice and support.
Author Michael Branson
About the Author, Michael G. Branson | Mike@allreverse.com
Michael G. Branson CEO, All Reverse Mortgage, Inc. and moderator of ARLO™ has 45 years of experience in the mortgage banking industry. He has devoted the past 19 years to reverse mortgages exclusively.