Loan balance exceeds the value of the home

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Reference no: EM131020290

You are 62 years old, and your house appraises for $450,000. A bank is willing to give you a reverse mortgage at 50% LTV with a 6% fixed contract rate. You choose an option to receive equal monthly payments over a period of 10 years.

a. What will these payments be?

b. If you choose to move after 5 years, what will you owe the bank?

c. If the home appreciates at 1%, how old will you be before your loan balance exceeds the value of the home?

Reference no: EM131020290

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