The Mortgage Professor
Guiding borrowers to the right decisions
Protecting borrowers from mortgage predators
Reverse Mortgage Calculator
Step 1: Enter Information About You and Your House
 
Borrow Against My Current House or Purchase a House:
Your Birthdate:    (ex: 3/15/1940) Help
Your Spouse's Birthdate:    (ex: 3/15/1940) Help
Property Value:    (ex: 300000) Help
Property Zip Code:    (ex: 90210) Help
Existing Mortgage Balance and Liens:     (ex: 120000) Help
Expected Years in House: Help


Calculating...
Your Borrowing Power: On a fixed-rate HECM, this is the cash you draw at closing, in addition to repayment of any existing mortgage debt. On an adjustable-rate HECM, it is the total credit line, also an addition to repayment of any existing mortgage debt, but some of the line may not be available until a year after closing.
Birthdates: If both spouses are 62 or older, both are covered by the HECM. If one spouse is less than 62, payments cease upon the death of the older spouse but (subject to conditions) the younger spouse can remain in the house.
Birthdates: If both spouses are 62 or older, both are covered by the HECM. If one spouse is less than 62, payments cease upon the death of the older spouse but (subject to conditions) the younger spouse can remain in the house.
Property Value: Be conservative in making your best guess. The value used in the HECM contract will be based on a professional appraisal.
Property Zip Code: This is used to find the set of HECM loan providers who can deal with you. Many of them operate in only one or a few states.
Existing Mortgage Balance and Liens: Report the balance from your most recent financial statement. A HECM requires that you accept a new first mortgage on your home, which means that any existing mortgage or mortgages must be paid off with proceeds from the HECM. This will use some, and in some cases it might even use all of your HECM borrowing power. However, unlike your existing mortgages, the HECM will have no required payment.
Years in House: This period is used to find the best combination of interest rate and settlement costs. The combination is selected that minimizes your HECM loan balance over this period.
Amount Available for House Purchase & Credit Line: Users can also opt for cash draws or monthly payments.
Mandatory Repayment of Existing Mortgage Balance: Any existing mortgage or mortgages must be paid off with proceeds from the HECM.
Regulatory Restrictions on Cash Draws: HUD limits the amount of cash that can be drawn within the first 12 months of a HECM closing. Since upfront cash draws are the only option on a fixed rate HECM, part of the borrowing power on fixed rate HECMs is unusable.
Available Borrowing Power: The available borrowing power is the credit line on an adjustable rate HECM that can be used to draw cash or purchase a monthly payment, but some of it may not be available for 12 months. On a fixed rate HECM, it is the amount of cash that can be withdrawn at closing.
TALC: This number is required by regulators. It is of no use to borrowers in making decisions about their HECM.
Ratio of Available Funds to Settlement Costs: Available Funds are the sum of initial credit line, mortgage balance repayment, other upfront cash draws, and the present value of the monthly payments.
Upfront Cash Desired: This is in addition to any cash required to repay an existing mortgage balance.
Monthly Payment: Monthly payments use borrowing power equal to the estimated present value of the monthly payments.
Credit Line: The amount you would like to reservce as a credit line for future use.
Credit Line Remaining: This is caculated as a residual given the desired cash withdrawal and monthly cash payment.
Credit Line: The amount available for future use. If untouched, the credit line grows with interest over time.
HECM Charges: Lenders post multiple combinations of interest rate and origination fees to appeal to borrowers with different expectations about how long they will have the HECM. The combination used here is the one that minimizes the borrower’s loan balance over the period he expects to be in his house.
Other settlement costs: These include title insurance, closing agent fees, and recording costs.
Future Projections: Future Projections: Year-by-Year projections of the borrower’s debt, remaining equity, unused credit line and conversion options.
Future Financial Status Based on Expected Interest Rates: Draw amounts on HECMs are calculated using an 'expected' interest rate rather than the actual HECM rate prevailing at that time
Financed Settlement Costs These settlement costs do not include any mandatory expenditures on property improvement that FHA might require as a condition for insuring the HECM.
Privacy Policy: Your phone number and email address will only be used to answer your question(s). You will not receive calls or emails from other parties and your personal information will not be sold or given to any other parties.