I have looked everywhere I could thin k of on the internet to find a calculator to approximate the payback costs of a reverse mortgage when the loan is due. I can not find anything that can help me.
Does anyone know how to figure this cost out? Assuming the loan would be called due in 15 years.
Value of home $ 616,000.00
Total money borrowed at closing $ 245,000
NO OTHER ADVANCES FROM THE AVAILABLE CREDIT.
Reverse Mortgage is another way to lose your home. The amount of interest x the borrowed amount x length of loan.
Example: 245k x 2.37% (0.1975) x duration + original amt. = amount total repay.
This is used for illustration purpose ONLY. Your best course of action would be to have the financial institution you are dealing with provide a clear, everyday people explanation. AND do not sign anything without fully understanding the contract.
If you are using a HUD preferred broker, the money is not due until one of two situations takes place: 1) the owner passes away (dies) or 2) they no longer reside at the property that is in lien. Read the second site listed.
Reverse mortgages aren’t ever called due. They are due when you sell or die. This case you would just use a regular calculation to compute your total cost. Make a spreadsheet with the years down the first column. Have the total in the 4th Column, and the interest rate in the 2nd column. In the third column have a formula taking the total time the rate and adding it to the total from the forth column. Put the new answer in the 4th column for the next year. copy down 15 years.
WARNING the interest rate isn’t the APR the use the real interest rate.
Your loan balance will get bigger every year and the orginal closing cost are outrageous. You can get them as young as 62 but if you are that desperate at 62 you probably can’t afford to stay in your home.
Read up on reverse mortages
google reverse mortages complaints or rip-offs
This is the WORST thing you can do to achieve your retirement goals. /