Wednesday, December 09, 2009

Reverse mortgage loan: Right way to plan your future!

Reverse mortgage loans have plays an significant role in your old age when someone really want financial help. All you need to be 62 years old, American and the owner of your home. Loan which is borrowed against the home equity and the lender will pay them according to the plan, which they have selected are somewhat known as reverse mortgages loan. Either as a lump sum, monthly payments, a credit line or as a combination of these. All interests will be added to the loan sum and paid back, when the loan will be closed. So the borrower does not pay anything on a monthly or annual basis.

Some common factors on which loan sum depends are like your age, about the interest rates and about the appraised value of your home. The older you are, the more valuable your home and the lower the interest rates are, the more you can get. Anything you owe on your home is subtracted from that amount, as are the loan fees you'll pay. Clients are provided a list of at least ten HUD counseling agencies that can provide HECM counseling from the lender. At least five of these must be in the local area of the borrower, with at least one agency located within a reasonable driving distance for the purpose of face-to-face counseling.

Always keep in mind that the reverse mortgages are expensive loans. First the origination fee is 2 percentages for the first 200.000 dollars of the loan balance and 1 percentage after that. Then you have to pay a mortgage insurance of about 2 percentages plus a monthly service charge.

Now the question rises in the mind is that how to calculate reverse mortgage? A reverse mortgage calculator is the tool which would help you to choose your best suited loan which is also quite easy to use. You only have to input a couple of personal details into the reverse mortgage calculation page and it will estimate approximately how much money you are eligible for. The required details consist of your zip code, the dates of birth of all persons on the title to your home, what you think your home value is, and what your current mortgage balance is, if any. Once these details are entered, the reverse mortgage calculator will then show you the approximate loan amounts for several loan programs that you are eligible for.

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