San Francisco, California (PRWEB) January 5, 2006
Repeated questions from callers asking “so how much do I qualify for” now are answered online with NewRetirement.com’s reverse mortgage calculator. Retirees will find the new reverse mortgage information online in website’s analysis of reverse mortgages (http://www.newretirement.com/Services/Reverse_Mortgage.aspx ).
Unlike a typical home mortgage or mortgage refinance (sometimes called ‘forward mortgages’), a reverse mortgage doesn’t require repayment as long as the homeowner remains in their primary residence. The money provided by a reverse mortgage lender can improve a senior’s cash flow, effectively increasing their retirement income. For those hoping to retire and age in place, but facing increasing expenses, such as healthcare costs, a reverse mortgage can be an attractive option. The first question many have on their mind is: “what kind of income can I get from a reverse mortgage?”
To provide an estimate of the reverse mortgage loan amount for which a senior can qualify, the calculator requires the homeowners’ zip code, birth date and estimated home value. If the senior homeowner inputs optional data, their mortgage balance and payments, the online calculator provides a more detailed estimate of the impact on their current income.
Seniors may have a surprise in store – often, reverse mortgage loans provide less than they expect. A common misconception is the loan amount available will be around eighty percent of the home equity. In fact, the percentage of the home’s equity available varies with each borrower. This is because the amount of a reverse mortgage is dependent upon the following four factors: 1. the borrowers age (minimum age 62); 2. current interest rates; 3. the appraised value of the house or the government mandated mortgage lending limits for the borrowers locale, whichever is lower; and 4. the type of reverse mortgage selected. The reverse mortgage calculator considers all these factors to calculate an estimated loan amount.
The reverse mortgage calculator at NewRetirement.com shows the amount available from the three most well known types of reverse mortgages: the HECM (Home Equity Conversion Mortgage) administered by the Department of Housing and Urban Development’s Federal Housing Administration (HUD-FHA); the Home Keeper Mortgage® administered by Fannie Mae; and the Financial Freedom™ Cash Account ™ from Financial Freedom Senior Funding Corporation. These types of reverse mortgages are available from most reverse mortgage lenders.
To demonstrate the range of possible outcomes specific examples are helpful. As a first scenario using a HECM, the HUD reverse mortgage, an 85 year old prospective borrower with no mortgage lives in their median priced home in San Francisco, today appraised at $750,000. They would qualify for about $230,000 in a lump sum or line of credit; or a monthly payment of about $2000 – a significant sum, but not eighty percent of the appraised value. If the same borrower were instead 62 years old, they would qualify for a lump sum of about $156,000 or they could choose payments of $900 per month. However, if the 62 year old borrower had a mortgage balance of $156,000 or more, they wouldn’t qualify at all. The existing forward mortgage balance would exceed the available reverse mortgage loan amount – needed to pay off the forward mortgage. Alternatively, in the first scenario, the 85 year old with no mortgage would also qualify for the Financial Freedom™ Cash Account™, which could provide the most funds of all three, about $350,000 in a lump sum or line of credit. Generally, the more home equity and more years of age a senior has, the larger loan amount they will qualify for.
Fortunately, if retirees use this reverse mortgage calculator, they can see all this information laid out in an easy to read chart and compare the options available to them. Hopefully, the outcome will help them fulfill their retirement plans.
In addition to an analysis of the advantages and disadvantages of a reverse mortgage, the NewRetirement website provides analysis of a variety of other retirement planning financial services and products: mortgage refinancing, debt consolidation, annuities, relocation, financial advisors, supplemental health care insurance and long term care insurance. NewRetirement also offers a proprietary data analysis engine, presented in the form of a retirement calculator. This free retirement calculator interactively responds to visitors’ input with customized presentation of financial planning options matched to their specific situation.
About NewRetirement LLC.
NewRetirement LLC was founded in 2004. NewRetirement’s management team is made up of people that have experience and education from several nationally-known organizations. Among these companies are: Charles Schwab, JP Morgan, Embark.com, Wells Fargo, E-Trade, The Princeton Review, BusinessWire, AllAdvantage.com, Insurance.com, Viant Consulting, Williams Sonoma, Seer Technologies (IBM/First Boston), and US Web among many others. Among the educational institutions are: Stanford' s Graduate School of Business Administration, the University of Michigan' s Graduate School of Business Administration, Boston University, Haverford College, Carnegie Mellon and several others.
NewRetirement.com's corporate headquarters is located at 625 Market Street, Suite 1600, San Francisco, California 94105. Paul Lowrey, Director of Marketing, can be reached at 415-738-2435. Email inquires email should be sent via the site’s Contact Us page. The website URL is http://www.newretirement.com.