There is a new tool for your computer or cell phone that calculates the approximate down payment a senior (62 or older) would make in order to purchase a home at any value. There are a number of Reverse Mortgage Calculators on the web, but few, if any, actually calculate the estimated cash that a senior needs. With this site you simply enter the value of the home and use the drop down button for the age. The result will be the approximate down and the proceeds from the Reverse Mortgage.
The results of the calculations are identical to the one that you can find by going to my HomeServices Lending web site at www.homeloans.com/ken-keranen. If you went to that calculator and others on the web you would key in the data and find out the amount of "funds available to you". You then take this figure and subtract it from the home value. The result would be the down payment needed. What I've done here is to make it much easier and quicker. Here's the short way to get to this new "Down Payment Approximator": http://tinyurl.com/32rxg28.
With a Reverse Mortgage, there is no set date of payoff and no monthly payments. The Government (FHA) has promised the senior through the Mortgage Insurance Premium (MIP) that seniors get to remain in their home for the remainder of their life without having to ever make a mortgage payment. For this guarantee, FHA charges a premium of 2% of the value of the property (up to a property value of $625,500) that is rolled into the loan. For the "...Approximator" and also the HomeServices Lending site's calculator, we are taking this premium into consideration and have added an additional $2,000 for other closing costs. The closing costs can and do vary by location and price of the home. I hope that Realtors at least take a look at this new tool.
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