Quick Calculator (No salespeople will contact you)
One of the first questions a potential borrower asks is, “How much money can I borrow?” There are HECM calculators available that provide a decent estimate of what you might be able to borrow and not open your private information or interest in a HECM to a salesperson.
The National Reverse Mortgage Lenders Association (NRMLA) has an excellent HECM calculator, available to anyone. It will only estimate what you can borrow based on your age and your estimate of your home value (which, if not accurate, can make a big difference). So go visit a few of the best real estate sites such as Zillow or Trulia and get as good an estimate of value of your home as possible.
Also have an idea of your outstanding existing mortgage balance and any related HELOCs (if any) and the monthly payments.
Now go to the calculator at NRMLA and input your details.
A few words about the Calculator Output:
Please be aware that NRMLA calculator will not estimate or calculate your monthly residual income requirements. That is a separate exercise that requires more time and complication that this model will solve for.
If you have an existing mortgage, and that mortgage payoff and/or the amount of cash you want to pull out immediately exceeds 60% of the calculated available amount (what is identified in the results as the available “Principal Limit”) the upfront Mortgage Insurance will be 2.5% of the value of your home (which home value is maxed out at $625,500 for the HECM program). If less than or equal to 60%, the upfront Mortgage Insurance will be 0.50% of the home value. So play around with how much you really need in that first 12 months of the HECM. It makes a big difference in costs.
The Monthly Amount calculated is that available monthly amount after you pay off all existing mortgages or set aside money for repairs, or after a portion is paid out in immediate cash to you (if you elected this option) or after setting aside a requested Line of Credit Amount. It is the Monthly Tenure Payment, which is a payment made to you for as long as you occupy your home, regardless of how long that might be. The calculator assumes you will live to 100 years of age in making the calculation. This is just illustration. You do not have to choose this option.
The Calculator also shows you how much your monthly income will increase if you use the reverse mortgage to pay off an existing mortgage. (The theory is that if your previous mortgage payment disappears, you will spend that amount less every month after you obtain a reverse mortgage, and this savings can be thought of as a positive change in your monthly cashflow).
Go play with the Calculator, and you will get the idea! No Salespeople will bother you!
Would you like to learn more?
The “Knowledge Base” has the answers to over 300+ questions you may have on the HECM product.
If you would like to know how much you potentially qualify for, and whether you possibly have adequate monthly cash flow, go to the HECM WIZARD and input your information.
If you would like to reach out and talk with me, fill out the information on Contact Me or email at st.john.bannon@JMCapGroup.com