Reverse Mortgages — What The Calculators Don’t Say

by Peter G. Miller
June 13th, 2007

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I’ve been looking online for a reverse mortgage calculator that tells me what I want to know — and what you should want to know.

There are plenty of calculators online and many want your ZIP code and date of birth. I’m okay with that. The forms want to know the value of your home. That’s fine and that’s fair. And the forms would like to know the size of your current mortgage and your monthly home payment. That’s okay too.

After filling in a quickie form and pressing the magic “next” button your results then appear. What you see is typically a comparison allegedly showing how much you can borrow under two or three different mortgage programs and how much monthly income you can get.

So far, so good — but not enough. What is the interest rate used to generate such calculations? What are the closing costs? Is there a monthly servicing fee? How much?

I realize that interest rates vary and the quote today may be different than the quote tomorrow. But if I don’t know the rate of interest used to calculate my reverse mortgage then I don’t know if the calculation is reasonable or off the wall.

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This entry was posted on Wednesday, June 13th, 2007 at 8:34 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “Reverse Mortgages — What The Calculators Don’t Say”

Stephen Lamoreaux Says:
June 13th, 2007 at 3:12 pm
Peter,
There is no reason you should not contact a reverse mortgage professional directly to get your questions answered. Any professional worth his salt should be willing to provide you this information without any obligation. If you cannot find someone locally, you are welcome to contact me (in CT) — I have been solely specializing in reverse mortgage for over 4 years and spend much of my time educating folks about these programs.
Peter Miller Says:
June 14th, 2007 at 4:13 am
Steve –

Thanks for your note.

The issue is not professionals and their salt, the issue is that many online calculators do not provide basic information that is important to borrowers.

For instance, why not have online calculators that produce an amortization statement so reverse mortgage borrowers can see the full extent of their potential debt? That’s important to lenders — and it is no less important to borrowers.