Reverse Mortgage Maturity Reserve Calculator

Quickly size the cash cushion heirs may need when a reverse mortgage comes due. Provide the projected payoff balance, the expected sale price, and typical closing costs to see net proceeds, any shortfall versus the loan, how far cash reserves stretch, and what share of the balance sale proceeds will cover.

Estimate the payoff quote your servicer will issue when the loan becomes due.
Likely contract price or broker opinion of value for the property.
Broker commissions, transfer taxes, and closing fees as a percent of sale price.
Enter liquid funds earmarked to cover any payoff gap. Defaults to $0 if left blank.

Outputs assume a single lump-sum payoff and do not include property taxes or insurance that accrue before closing. Confirm payoff statements and timelines with your servicer before distributing estate assets.

Examples

  • $410,000 payoff, $525,000 sale price, 7% costs, reserve blank ⇒ Net sale proceeds after $36,750.00 in costs: $488,250.00 USD • Loan payoff compared to proceeds yields $78,250.00 USD available for heirs • Proceeds cover 100.00% of the loan balance.
  • $520,000 payoff, $500,000 sale price, 6% costs, $20,000 reserve ⇒ Net sale proceeds after $30,000.00 in costs: $470,000.00 USD • Loan payoff compared to proceeds yields $50,000.00 USD shortfall before reserves • Heir cash reserve applied: $20,000.00 USD • Remaining gap after reserve: $30,000.00 USD • Proceeds cover 90.38% of the loan balance.

FAQ

What if the servicer's payoff is higher than expected?

Update the projected balance with the payoff statement once issued. The calculator will immediately show how much additional cash is needed or released.

How do FHA insurance claims factor in?

If the sale price is below the balance, FHA covers the deficiency after closing. Enter the actual sale price to estimate the cash you must front until the claim reimburses the servicer.

Can I model keeping the property?

Yes. Replace the expected sale price with an appraised value and compare the shortfall to the cash available to refinance or pay off the loan outright.

Should I include property repairs?

Add anticipated repairs or clean-out costs to the selling cost percentage so the net proceeds reflect real-world listing prep.

Additional Information

  • HECM loans give heirs at least six months (with possible extensions) to sell before the lender demands full payoff.
  • Selling cost percentage should include broker commissions, recording fees, prorated taxes, and modest repair credits.
  • If the home sells for less than the balance, FHA insurance typically covers the difference, but estates still need cash to close before any claim is processed.
  • Use the reserve field to test whether life insurance or liquid accounts can bridge the payoff gap without forcing a quick sale.

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