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?