Alert
Close

Top the Treasure Hunt leaderboard by 5 p.m. Friday to win a $100 gift card! Learn more

Highlights

Open

Contests and
Sweeps

Safe Driving in 2014 Sweepstakes

Learn how AARP Driver Safety can help you stay safe—and enter for a chance to win $1,000. See official rules. 

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

webinars

Learn From the Experts

Sign up now for an upcoming Money webinar or find materials from a past session. 

Jobs You Might Like

most popular
articles

Viewed

Total Costs and Model Specifications for Reverse Mortgages

At the end of a reverse mortgage, all of your home's value will have been turned into one of these three things: loan advances, loan costs, or leftover equity.

AARP's model specifications are rules for estimating how much of your home's value will have been turned into these three things at various future times. They also show how to estimate a total annual average loan cost for each of these future times.

When a lender or counselor uses computer software based on the specifications, all of these estimates are based on the creditline advances and future interest rate that you select. You can also choose the rate at which you expect your home's value will grow.

By varying these factors, you can see what effect each has on a loan's total cash advances, total cost, and leftover equity. Keep in mind, however, that all of these figures are estimates. The actual figures will depend on:
• the actual creditline advances you select during the loan;
• the actual interest rates charged on the loan; and
• the actual changes in your home's value during the loan.

The model specifications were originally developed to help consumers compare different types of reverse mortgages. But the estimates they produce are also very helpful in understanding any individual loan. They show you the total picture of what would happen to your home equity based on
• how you expect to use your loan,
• what you think will happen to interest rates, and
• what you think will happen to your home's value.

Articles on "Selecting a Counselor" and "Selecting a Lender" explain how to get loan analyses and comparisons that meet the model specifications.

Cost Versus Other Choices

TALC disclosures and other measures estimate the total cost of a HECM. But only you can determine how much it would be worth to you.

How important is it—how much would you pay—to remain in your present home? To help you evaluate the cost of a reverse mortgages, you need to compare it to what may be your two main alternatives:
• selling and moving elsewhere; or
• continuing to live in your present home with your current income and assets.

AARP does not endorse any reverse mortgage lender or product.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

AARP Financial Services

Info on saving for education from AARP® College Savings Solutions from TIAA-CREF.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.