1. What is a Reverse Mortgage Rates Today Calculator?

Definition: This calculator estimates the principal limit available in a reverse mortgage based on the home value and current principal limit factors.

Purpose: It helps homeowners aged 62+ understand how much they might qualify for with a reverse mortgage under current rates and regulations.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( PL \) — Principal Limit (USD)
• \( HV \) — Home Value (USD)
• \( PLF \) — Principal Limit Factor (decimal)

Explanation: The home value is multiplied by the principal limit factor (determined by age, interest rates, and HUD tables) to calculate the maximum loan amount.

3. Importance of Reverse Mortgage Calculation

Details: Accurate calculation helps seniors understand their borrowing power while maintaining home equity and meeting financial needs.

4. Using the Calculator

Tips: Enter the current market value of your home and the principal limit factor (default 0.55). PLF typically ranges from 0.40 to 0.75 based on age and rates.

5. Frequently Asked Questions (FAQ)

Q1: Where do I find current principal limit factors?
A: PLFs are published by HUD and vary by borrower age and expected interest rates. Check with reverse mortgage lenders for current factors.

Q2: Does this include all reverse mortgage costs?
A: No, this shows gross principal limit before deducting mandatory costs like mortgage insurance and closing costs.

Q3: Why does age affect the principal limit?
A: Older borrowers qualify for higher percentages because the loan term is expected to be shorter.

Q4: How often do principal limit factors change?
A: PLFs adjust when HUD updates its tables, typically in response to interest rate changes.

Q5: What's the maximum home value considered?
A: For HECM reverse mortgages, the current maximum claim amount is $1,149,825 (2024).