When it comes to wrapping your mind around the concept of a reverse mortgage, much less making a decision about whether or not to use one, a reverse mortgage calculator is an indispensable tool. And while a "reverse mortgage calculator" may sound like something you would have to special order from your nearest office supply store, don't fret. There are dozens of these calculators available online from the various lenders and senior associations.

The most important thing to remember when using a reverse mortgage calculator is the old rule of "garbage in, garbage out." In other words, if you don't understand what information to enter and where, you're likely to get a misleading result that will be of no real help. So take a few minutes to read through this guide and get familiar with the most common information you'll need and why.

Dates of Birth
Every legitimate reverse mortgage calculator you find will ask for your date of birth (as well as your spouse's or partner's, if there is a co-owner). Of course, since age is one of the last facts most people would choose to divulge, it's important to understand why you can't skip this question or lie about your age.

The companies that offer reverse mortgages do so to make a profit. Part of how they make that profit is by trying to estimate, as closely as possible, how long they can expect to be making payment to you. If you end up living 10 or 20 years longer than expected, that's going to cost the mortgage company a pretty penny. Had they known you were going to live that long, they'd have offered you less money every month.

In the end, there is no other factor that directly affects your payout rate like age. Single, older males will receive the highest payout rates, because they're statistically the most likely to die the soonest. Younger couples (in their mid-60's) will receive the lowest payout percentage overall, since it's likely to be a long time until both of them pass away.

Location of Home
Most reverse mortgage calculators will ask for the zip code of the residence in consideration. This again comes down to the mortgage company trying to ensure a profit, as well as protect against a potential loss on your reverse mortgage.

Since the mortgage company is allowing you to steadily increase the amount that is owed to them over time, they want to make sure that your home isn't in a market that is overpriced or beginning to plummet. If they're not careful, paying out too much on a home in a sliding real estate market can leave them with a substantial loss. Naturally, if you do get a reverse mortgage, they're going to require a thorough appraisal of your property.

Home Value, Loan Value, Equity, etc.
Once the payout factor is computed (which is mostly a function of your age and your home's location), it's applied to your equity balance to compute the actual payment you'll receive. So naturally, any reverse mortgage calculator you use is going to ask some version of "what's the value of your home?" This is where, especially when the reverse mortgage calculators begin using real estate terms, it's easy for the average consumer to screw up their calculation.

The crucial number that the reverse calculator ultimately needs, is your equity in the home. In other words, when you subtract what you owe on your home from its market value, what's left over? That's your equity.

Some reverse mortgage calculators ask for each component (home value and current outstanding loans) separately. Other calculators simply ask you for your equity balance, requiring you to do the math on your own. Either way, make sure you input the right number so you get as realistic an estimate as possible.

Email Address, Contact Information, etc.
Some calculators will ask for your actual address, phone number, or other contact information. Other times, they'll even require you to input your email address to receive the results of the calculation. In all of these cases, unless you're ready to be solicited, don't give them personal information. All this info is likely to be used for marketing purposes since none of it is actually requ ired to use a mortgage calculator.