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Reverse Mortgage Interest Rates

It's Tuesday! And that means it's time for our weekly reverse mortgage interest rate update. Here are the current rates for the top reverse mortgage programs:

FHA Home Equity Conversion Mortgage (HECM) rate: 3.57% (Index is the 1 Year CMT at 2.07% plus a margin of 1.5%)

FHA Fixed rate HECM Reverse Mortgage: 6.06% to 6.40% (depending on the bank)

Financial Freedom Cash Account Advantage Reverse Mortgage: 6.39% (Index is 6 month LIBOR at 2.89% plus margin of 3.5%)

Bank of America Independence Plan Reverse Mortgage: Suspended

These rates are not an APR as they do not include closing costs. Please contact your lender for a reverse mortgage quote.

Posted by Luke Helm on 05/20/2008 01:32 PM

Comments (4)

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4 Comments on Reverse Mortgage Interest Rates

MAY

2008

Hi Luke,

Thanks for the info. Have a great week. Michael A. Caruso

Luke - I'm selling a condo in a building in Los Angeles where the owner is in his mid 80's and has a Reverse Mortgage on the property. The Presiednt of the HOA came to discuss another owner selling his condo in the same building. I have two questions for you:

1. If the owner were to keep his condo, would he receive "income" from his Reverse Mortgage for life, or is it limited to a number of years?

2. If the owner sells his property, how is the "settlement" on the Reverse Mortgage handled by the escrow company handling the sale?

MAY

2008

Stewart,

thanks for your question.

If the owner qualifies for the reverse mortgage, he could get income from the reverse mortgage under the "tenure plan" which lasts for as long as he keeps the loan, which could be for life if he so chooses. Check a reverse mortgage calculator like this one to see how much your client qualifies for.

The final settlement of the reverse mortgage is handled by escrow just like any other mortgage. The amount currently owed to the lender is paid off and the remaining funds sent to the homeowner.

Best,

Luke

866-311-3360

Luke - I appreciate your reply - Thanks.

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