'Interest Rates' Category Archives

How the Reverse Mortgage Margin & Libor Rate Works

June 10, 2024     8 comments

[arlo_toc] Understanding Your Reverse Mortgage: Key Factors One of the most common questions about a reverse mortgage is how much money you, as the borrower, can receive.  The amount you can get depends mainly on two factors: your age and the loan's interest rate and margin. Typically, the older you are, the more money you can receive.  Lower interest rates...
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Reverse Mortgage Amortization Schedule Explained

January 20, 2024     4 comments

Once you have decided that a reverse mortgage is right for you, looking at the amortization schedule is essential.  A reverse mortgage amortization schedule is a document that will provide the best estimate of how the loan will hypothetically perform over time. The amortization schedule must use the rates and draw amounts available when you run the schedule to look forward...
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Reverse Mortgage Expected Rate is Key to the Principal Limit

September 12, 2022     6 comments

Many homeowners understand that when they qualify for a reverse mortgage, they're eligible for a loan amount that's a percentage of their home's value or the HUD Lending limit, whichever is lower.  This amount, commonly known as the 'Principal Limit,' is a key factor in reverse mortgages. Yet, the 'Expected Rate' is a lesser-known aspect that significantly impacts the available...
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Which is Best? Fixed vs. Adjustable Rate Reverse Mortgages

July 26, 2022     19 comments

If you’re planning to stay in your home but worry about your savings lasting through retirement, a reverse mortgage could help you achieve financial peace of mind.  Reverse mortgages allow you to access your home equity without making monthly payments, giving you flexibility and security in your retirement years. [arlo_toc] What Are the Types of Reverse Mortgages? The most common...
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HELOC Resets Create ‘Perfect Storm’ For Reverse Mortgages

October 20, 2021     3 comments

Senior homeowners may be looking at a combination of events that could equate to the perfect storm brewing that doesn't even appear on most of their horizons. There is a combination of events, those that have already happened, those that are going to happen, and those likely to happen, that could leave many senior homeowners in a real bind. So...
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How the SOFR Index Affects Reverse Mortgage Rates

August 25, 2021     2 comments

For several years, adjustable rate reverse mortgages used a variety of indexes which determine a benchmark interest rate that when added to a margin set by the lender, would determine the final interest that borrowers would accrue on their loan. The rules for the choice of an index is that it had to be out of the lender’s control...
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Reverse Mortgage Fixed Rate & Unusable Funds Explained

August 23, 2021     6 comments

If you have decided that you’d like to use a reverse mortgage to tap into your home equity while remaining in your home, there are several considerations that will help you determine how to make the most out of your loan.  A reverse mortgage can be an excellent way for some households to boost their cash flow in retirement, establish...
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Advantages and Disadvantages of Fixed Rate Reverse Mortgages

August 23, 2021     4 comments

Fixed Rate Reverse Mortgages – which is right for you? Many senior borrowers have been raised on the idea that a fixed rate loan is the “only way to go”. Still others remember back to the early 80’s when interest rates climbed as high as 18%. Some borrowers experienced rising interest rates from adjustable rate loans (or knew others who...
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When is the Best Time to Take a Reverse Mortgage?

March 14, 2021     4 comments

Ultimately the right time to get a reverse mortgage depends on what works out best for the borrower. The timing must be right for you and your needs.  But we hear borrowers who are convinced that they want the loan but are thinking that they should wait a year or two until one of the borrowers is older so they...
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Reverse Mortgage Treasury (CMT) as Transitions to SOFR

October 12, 2020     2 comments

Overview With GNMA's recent announcement, HECM ARMs using LIBOR as their index will soon not be viable to originate. While LIBOR has been destined to be phased out for some time, this unexpected announcement will require a faster transition than was expected. The framework around SOFR, the anticipated replacement to LIBOR, has not been fully developed yet, and as such adjustable-rate...
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