I have a question about senior citizen reverse mortgages. How do the monthly payment calculations work? Also, what happens if I live a long time and the payments exceed my home’s market value?
- J.L. Miami (Dadeland Mall Area), Florida
The Three Reverse Mortgage Lenders
Well first off, there’s three nationwide reverse-mortgage lenders. Those three are FHA, Fannie Mae, and Financial Freedom Plan. So when it comes to payments, yes, you guessed it, there’s three separate formulas to calculate the payments they’re going to give to you.
The Three Parts of the Formula
The reverse mortgage calculation is based on the age of the youngest borrower (minimum age is 62), the home’s market value, and the adjustable interest rate at the time you get the reverse mortgage.
Reverse Mortgage Lender Payment Comparison
If you go to FinancialFreedom.com, you can input your age and home value and they’ll give you a comparison of what each of the three reverse mortgage lenders will give you.
Reverse Mortgage Secrets
As you can imagine, the older you are, the more money you can receive, due to a lower life expectancy. Usually, FHA is the best option if your home is worth less than $400,000. Financial Freedom Plan is best for expensive homes because there is no maximum limit.
What if I Outlive the Reverse Mortgage?
Good news – the reverse mortgage lender must continue paying you each month – even if the total principal and accrued interest is more than your home’s market value!
Did you like this article?
Related Posts:
[...] may remember my previous post on the topic of reverse mortgages titled Reverse Mortgages: How Much Money Can I Receive. I covered a question posed by one of my readers and I talked about the 3 parts of the reverse [...]