Home loans where older homeowners or people with small mortgages are not required to pay any periodic debt payments are called reverse mortgages. While taxes and insurance for the property that is a primary residence is still the responsibility of the homeowner, the home equity, or the difference in the market value and the outstanding balance of all the claims on the property, is enjoyed by them. The loan amount is repaid only when the homeowner moves out permanently or passes away.

Considered the last expedient, reverse mortgages supplement the income of retirees over the age of 62, when social security payments are unreliable and pension amounts reduce, while medical costs continue to increase. Homeowners owe only the value of the home in a reverse mortgage loan regardless of how much they borrow, it is an advantage. On the other hand, if the balance is less than the value of the home at the time of repayment, then the difference is retained by homeowners or their kin. Seniors can access the home equity either as a lump sum, as monthly payments or as a line of credit or as a combination of all three.

In AARP’s online reverse mortgage calculator, customers have to provide certain data like their zip code, date of birth, the co-owner or spouse’s date of birth, and the value of their home. With this information, the calculator works out the home equity against which borrowers can take loans. Options of how the equity can be accessed, such as a HECM Standard fixed rate, where the interest rate is constant throughout the term of the loan; a HECM Standard LIBOR (or adjustable rate); or a variable rate HECM Saver is given. In addition, the AARP reverse mortgage calculator also gives details of the amount of money the borrowers can receive either as a lump sum or as monthly payments or with a line of credit. Online reverse mortgage calculators offered by lenders on their websites are the best, and the AARP reverse mortgage calculator is the simplest and the most direct of all that is available.