Reverse Mortgages

Reverse mortgages have a different purpose than normal forward mortgages do. With a reverse mortgage, you are taking the equity out in cash. So with a reverse mortgage, your debt increases and your home equity decreases.

Let's do an example:

The Jones' home equity is about 350,000 and now being at retirement age, they wish to "live a little" without selling their home. They wish to receive 75 000 up front and then 2500 in regular payments for 60 months. The interest rate for the loan is 9.5% annually.

Create a new Record with "File" and "New Record". See also Creating the first Record and Data entry screen Basics.

After 60 months, the Jones would owe 310,485.82.