Reverse Mortgage Interest Rate Options for HECM and Jumbo

The new annually adjusting CMT (Constant Maturities Treasury Index) is now available in all states. Enjoy the current low variable interest rates, only a 5 point lifetime cap above the start rate and the rate cannot increase more than 2 points annually, or the monthly adjusting option with a 10 point lifetime cap.  This option is very popular as a line of credit or monthly payment option is available and borrower’s have access to full principal limit on the second year. 

The fixed rate option offers an interest rate that does not change over the life of the loan. The expected interest rate has a direct impact on the amount available to the borrower. Contact Maggie for current rates.

               Let me explain how the amount available to the reverse mortgage borrower is calculated.  There are three factors involved in the reverse mortgage calculation:  1) Age of youngest borrower 2) home value or maximum claim amount and 3) expected interest rate.  The expected rate is tied to the 10-Year
LIBOR index and is used for calculation purposes as an indication of what rates are expected to be over a longer period of time.  The accrual rate uses the 1-Month LIBOR index or 1-Year LIBOR index depending upon the option selected. The index is added to your margin and determines the interest rate charged on the outstanding reverse mortgage loan balance.  But the expected rate determines how much you will receive from the reverse mortgage or HECM.

Jumbo reverse mortgage interest rates are fixed and lower rates provide less money to the borrower while higher rates provide more funds.  We will provide detailed quotes so you can select the best rate for you.