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Are Reverse Mortgage Calculators Really Accurate?

Mortgage and Lending with Shop Reverse Mortgages

In this blog post, I will write about the accuracy of reverse mortgage calculators. Florida residents who we speak with typically ask us this question after going online, and finding a calculator to give them a rough idea of some numbers. 

There are a few inherent problems with this tecnology. First, what is the reverse mortgage calculator actually calculating? What kind of variables are pre programmed into the calculator? You see, rates are typically tied to the LIBOR which changes frequently. 

Keeping this in mind, the accuracy of a reverse mortgage calculator is essentially dependent upon the how the programmer, programmed the calculator, the accuracy of the data it is pulling, etc. 


Should You Use a Reverse Mortgage Calculator?


It gets very difficult once you begin trying to calculate different offers from different lenders. For instance, if you are consider working with a reverse mortgage broker. The likelihood of them having direct access to the lenders up to date rates are extremely unlikely. They would need an API to feed them data directly from each individual lender in addition to the LIBOR information. It is not impossible, just very unlikely that it would be done correctly as well as accurate. 


Reverse mortgage lender calculators may be more accurate as they have direct access to their own web servers and can pull any information necessary. Since they are the creators of their financial formulas, creating an accurate reverse mortgage calculator could be possible. But again, there are many dynamic factors and variables that could make a reverse mortgage calculator inaccurate. 


Proceed with caution. If you choose to use a reverse mortgage calculator, you may be on what is known as a lead generation website. In other words, it will appear as if you will get a calculation but at the end they just collect your information and sell it to reverse mortgage lenders or reverse mortgage brokers. So make sure you are on a reverse mortgage lender website if you are going to use this tool. It will save you the headache of entering all your information just to get no result from the calculator. 


If you are just looking for a wild ballpark figure, I suppose it could be helpful. However, knowing that rates are always changing and being that this is a major financial decision; I would argue it would be best to speak with a reverse mortgage specialist who can offer you accurate estimates.


Rosemarie Heindel
Harry Norman Realtors - Big Canoe, GA
Rosemarie Heindel

Andrew...good advice. Unfortunately, many seniors are  tempted to use this route if they are need of financial assistance.  I live in a area where there are many seniors.  They don't want to ask their children for help, muchless share anything about need of help.  Many are afraid their children will swoop in and take aways their freedom.  Have a Merry Christmas!

Dec 12, 2015 12:56 AM
Andrew Kleinmann
Shop Reverse Mortgages - Boynton Beach, FL
We shop reverse mortgage brokers & lenders.

Thank you Rosemarie Heindel , fantastic feedback. It is very true, there are many seniors in my area as well in Palm Beach County, Florida. In some instances, it is a fantastic product. In other instances, other options are more feasible. It all depends on the person. 

Dec 13, 2015 04:24 AM