Better Reverse Mortgage Calculator Now Online
Kiplinger Magazine, an excellent financial resource, has a brief reverse mortgage item in the May issue entitled “How to Size Up a Reverse Mortgage.”
Essentially the article advocates running all the numbers before selecting a reverse mortgage product. Toward that end it points to the reverse mortgage calculator at Golden Gateway Financial.
Fill in a few blanks and the calculator then produces results for several lenders. Both FHA and non-FHA products are compared, but all are adjustable-rate products.
You can then press the “learn more” button for each loan choice. A new screen comes up which allows you to adjust the terms — maybe you want $50,000 up front, perhaps you want $1,000 per month, maybe you want a monthly income for life, etc.
Press “finish” and another screen comes up. It shows the cash received up front, loan fees, interest and insurance. Also, the page projects future values.
This is a much better approach then many of the reverse mortgage calculators online — forms which show how much you can borrow but not the costs for insurance, interest or fees.
Still, there’s more to be done.
For instance, future appreciation should be clearly shown for what is: a guess. We don’t know what the rate of appreciation will be — or if there will be any appreciation. Property values could decline over time in some markets. (Think of Japan, a country with a strong economy where the stock market and real estate prices peaked in 1989.)
In the same way the monthly payments and loan sizes can be compared on one page, why not also show fees, insurance and interest costs on the same page?
Also, the ability to get an amortization statement for each loan option would be valuable.
As always, if someone has a calculator that’s as good or better, please let us know.
