How exactly do you determine the amount of money that you can expect from your reverse mortgage lender every month? This type of reverse mortgage info can be estimated through your trusty reverse mortgage calculator.

Your Monthly Allowance

Your monthly loan advance is determined through an intricate process that involves the calculation of the amount of cash your home value can give you or the calculation of your principal limit.

As you know, several factors are simultaneously considered in setting your principal limit. These factors include your (and your co-applicants’) age and the value of your home. The principal limit is typically a percentage of your home equity and is bounded by the maximum allowable amount set by Fannie Mae.

After setting the principal limit, your reverse mortgage lender will approximate the number of years that you and your co-borrowers(s) – if you have any – are expected to live. Life expectancy tables based on statistically valid mortality rates are used for this purpose.

Interest Rate
Since reverse mortgages are loans, the lender quite naturally charges interest on the money you are drawing through your reverse mortgage loan. The rate of interest levied on a Home Keeper Mortgage loan is variable. That is, it varies with the average secondary market index released every week by the government.

However, even if the interest rate can and does change, you are guaranteed that your loan’s annual percentage rate will not increase by more than the maximum allowable rate increment which is 12 percent. Thus, an originally 6 percent APR will not go beyond 18 percent in the whole life of your loan.