A reverse mortgage is usually a secured home equity loan alternative for senior homeowners who are 62 years old or over. This type of loan is different from a traditional home equity loan because there is no need to use up the entire equity of the home as collateral in order to receive the loan. Instead, a reverse mortgage only requires the payment of interest on the loan balance, taxes, and the principal amount as long as the loan is still in effect.
Since many reverse mortgage calculators cannot accurately represent interest rates, it is always wise to use independent online tools that provide these figures. In addition, you should consider using several calculators because different lenders offer different interest rates. There are some lenders who offer a fixed rate while others offer a variable rate. If you only want to borrow a specific amount of money, you should use a calculator that computes the amount by using the Annual Percentage Yield (APY) and a number of other different interest rates.
You should also consider your circumstances carefully when deciding whether or not to obtain a reverse mortgage. For example, if you plan on living in your home for the rest of your life but anticipate some financial strain in the near future because of medical conditions or a poor economy, you may want to wait and save the money for a rainy day.
-Senior Reverse Network