Reverse Mortgage Rates
Below are current reverse mortgage rates. If you have any questions about the rates, please don’t hesitate to call 1-888-888-4834 or Request a NO Obligation quote.
|February 9, 2015||Fixed Rate||Monthly Adjustable||Annual Adjustable|
|Current Rates||4.25% – 5.06%||2.679% – 3.554%||3.386% – 4.261%|
|APR||**see below||**see below||**see below|
|Margin||N/A||2.25 – 3.125||2.25 – 3.125|
|Monthly Service Fees||$0||$0||$0|
|Payment Plans Available Under Each Program|
|Cash Lump Sum||Yes||Yes||Yes|
|Line of Credit||n/a||Yes||n/a|
|Monthly Payment Plan||n/a||Yes||n/a|
1Current lending limits are $625,500 in all areas of the US for the remainder of 2014. Call 888-888-4834 for details. Wholesale Rates
As you can see above, there is a range shown for all rates. The reason for that is we give you the option to choose the rate that best suites your individual situation. The general rule of thumb is that the lower the rate, the higher the origination fee will be. It’s a lot like “buying the rate down” on the forward side. When we discuss your scenario over the phone, we will give you all the details that go along with each rate, which includes a breakdown of all fees involved. Use our reverse mortgage calculator to see an estimate of what’s available to you.
*APR Example – 4.50% Fixed Rate, appraised value $250,000, intial principal limit of $152,500. APR would be 6.097%, including the 1.25% monthly MI.
The Total Interest Rate charged to a reverse mortgage is equal to the Margin + Index + Monthly Mortgage Insurance of 1.250%
Choosing Fixed Rate vs. Adjustable Rate Reverse Mortgages
Many seniors we speak to are dead set on a fixed rate reverse mortgage. Well, although it sounds like the most financially “stable” and conservative decision, it’s not always the best loan type. When making a decision, remember that changes in your interest rate do not affect your monthly benefit as you are not making monthly payments. Fixed rate reverse mortgages require that you take a full draw at closing. With a reverse mortgage, you accrue interest on only the money that’s been drawn. If you have a large payoff or wish to take all funds available to you at closing, then a fixed rate reverse mortgage may be your best option. On the flip side, if you do not need all the money that’s available to you, a fixed rate reverse mortgage may not be your best option. With an adjustable rate reverse mortgage, you can set up a line of credit, monthly payments, a lump sum or a combination of any of these. In a line of credit, interest is not accrued until you receive the money.
Fixed Rate Reverse Mortgage:
The fixed rate Home Equity Conversion Mortgage (HECM) eliminates the risk of adjustable-rate mortgages. With the HECM Fixed Rate loan, the borrower has the comfort of knowing exactly what their interest rate will be for the life of the loan and the certainty that the rate will never increase. In addition, since the interest accrual is known, borrowers will have the comfort of knowing exactly how much they may pass on to their estate. Borrowers must take a full draw at closing.
Adjustable Rate Reverse Mortgage:
Adjustable rate reverse mortgages have by far been the most popular reverse mortgage loan to date. They are based off of two indices; Treasury Index (CMT) and LIBOR Index.
LIBOR stands for “London Inter-Bank Offered Rate.” It is based on rates that contributor banks in London offer each other for inter-bank deposits. From a bank’s perspective, deposits are simply funds that are loaned to them. So in effect, a LIBOR is a rate at which a fellow London bank can borrow money from other banks. Rate calculations are complex as they incorporate variables such as time, maturity and currency rates. In October of 2007, the Federal Housing Administration (FHA) ruled in favor of allowing the LIBOR index to be used for reverse mortgages in addition to the Treasury (CMT). LIBOR loans in general carry lower margins than the CMT (Constant Maturity Treasury).
About the Treasury Index CMT (Suspended by Fannie Mae)
This index is an average yield on United States Treasury securities adjusted to a constant maturity of 1 year, as made available by the Federal Reserve Board. Yields are interpolated by the United States Treasury from the daily yield curve. This curve, which relates the yield on a security to its time to maturity, is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market.
Purchase Reverse Mortgage:
Beginning January 1, 2009, FHA began insuring reverse mortgage loans for Seniors to purchase homes. Reverse mortgages have traditionally been available for refinance loans in the past, provided the Senior resided in the home. Reverse Mortgage for Home Purchase.
Reverse Mortgage Refinance:
Rates on HECMs are still extremely low, but as they increase less proceeds will be available. It may be a good time for you to explore the option of a refinance now. Call one of our specialist to determine if it makes sense to refinance your reverse mortgage. (888) 888-4834.
Jumbo Reverse Mortgages:
We now offer Jumbo reverse mortgages.