How can I figure out what my MMI (mortgage insuance) will be with a reverse mortgage?

To figure out what your Monthly Mortgage Insurance (MMI) will be with a reverse mortgage, you can follow these steps:

Understand the Basics: Know that MMI for a reverse mortgage is typically 0.5% of the outstanding mortgage balance annually, divided into monthly payments.

Calculate the Initial Principal Limit: This is based on factors such as your age, the interest rate, and the appraised value of your home. The initial principal limit is the maximum amount you can borrow.

Determine the Outstanding Balance: This includes any existing mortgage balance that will be paid off with the reverse mortgage, plus any funds you withdraw at closing, plus fees and costs associated with obtaining the reverse mortgage.

Apply the Annual MMI Rate: Multiply the outstanding balance by 0.5% to get the annual MMI.

Annual MMI
=
Outstanding Balance
×
0.005
Annual MMI=Outstanding Balance×0.005
Convert to Monthly MMI: Divide the annual MMI by 12 to get the monthly MMI.

Monthly MMI
=
Annual MMI
12
Monthly MMI=
12
Annual MMI
​

Example Calculation
Initial Principal Limit: $300,000
Outstanding Balance: $200,000 (assuming no initial withdrawals)
Annual MMI: $200,000 × 0.005 = $1,000
Monthly MMI: $1,000 ÷ 12 = $83.33
In this example, your Monthly Mortgage Insurance premium would be $83.33.

Tools and Resources
Reverse Mortgage Calculators: Many financial websites offer reverse mortgage calculators where you can input your specific details to get an estimate of your MMI.
Consult with a Reverse Mortgage Counselor: They can provide detailed information and help you understand all the costs associated with a reverse mortgage.
Lender Estimates: Your reverse mortgage lender can provide you with an accurate estimate based on your specific situation and the terms of your loan.
By understanding these steps and using available tools, you can estimate your Monthly Mortgage Insurance cost with a reverse mortgage.