Fixed Rate Programs

There are a few fixed rate reverse mortgages available.

We can connect you directly to the institutions offering those options. If you are interested, please call us at: 866-441-0246.

The fixed rate programs arent that attractive.

The interest rate is significantly higher (greater then the average rate over the past 15 years on the HECM monthly adjustable) and your benefit is significantly less. On top of that, it requires that you draw all of the money up front, hence starting interest accrual on the entire balance. (Also, It may not be available in the near future. Rates were not available when I typed this.)

My experience shows that you are better off in the Monthly Adjustable HECM. Currently the rates are still at all time lows, as of today (8/20/08), the rate is 3.93%. With an average of just under 6% over the last 15 years. The high was 9.59 17 years ago. for it to hit is cap of ten points over the start rate (13.93), it would mean that the 1 year treasury bill rate, would have to go to 12.18%. Which though not impossible, unlikely.

If you take the fixed rate program, you will never see the benefit of the lower interest rate.

I hope I was able to help you make an informed decision.

Tamera

A recent signing reflected a 2 point something initial rate with an expected average of about 4.5.

It's way down, and it will stay there for some time.

Today there are 3 fixed Reverse Mortgage programs to chose from. One is called the "HECM Standard" with an interest rate between 4.99-5.06. Both interest rates result in the homeowner receiving the exact same amount of money. Another program, launched by HUD on October 4, 2010, is called the "HECM Saver". Homeowners "save" because FHA's mortgage insurance premium is lower, reducing the fees. But the program doesn't convert as much equity into cash - so that's the trade off. The last program is private, and all private Reverse Mortgages are referred to as "Jumbo Reverse Mortgages". There are two interest rates, 7 7/8 an 8 7/8. This program starts working better then HUD's FHA-insured program when the value of the home is $1,200,000.00. The lending limit is $6,000,000.00, which is way higher then HUD's limit of $625,500.00 for the FHA-insured program. Raymond