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Reverse Mortgage Rates

Reverse mortgage rates are the same for all reverse mortgage lenders. The true cost of different reverse mortgage programs, however, vary based on the different program or product.

Reverse mortgages may have fixed or variable rates. In practice, however, all true reverse mortgages have variable interest rates tied to the variable US Treasury rate. The lender margin, which varies very little from company to company, is added to the variable treasury rate to determine the rate to the borrower. These rates are adjusted on an annual, semi-annual, or monthly basis.

The reverse mortgage TALC rate is the total annual loan cost. Your reverse mortgage lender will provide this.

How does the Reverse Mortgage Rate impact your borrowing?

We will use an example to demonstrate:

Betty, age 76 and widowed, gets a reverse mortgage on her home. The house is worth $200,000 and she is able to receive up to $100,000 from the reverse mortgage. She elects to get the full amount and takes it as a lump sum. The origination fee and costs total $2500 and she will owe $360/year to service the loan. Based on an interest rate of 7.5%, she will owe just over $110,000 at the end of the first year. If Betty passes away in ten years, she will owe just about $200,000 assuming interest rates only have relatively minor variations. Her heirs will inherit whatever the amount the house has appreciated in value minus the cost to get the house sold. Of course, if Betty lives to be 98, there will probably be nothing left for her heirs, but she will have been able to live in her home for a long, long time with some cash in hand. In this case, Betty would get the best end of the deal.

The above is just a hypothetical example to illustrate how reverse mortgage rates impact the life of the reverse mortgage loan. Every specific situation will be slightly different.

Reverse mortgage rates do not change based on borrower profile. There is no negotiating and good credit or financial reserves make no difference. These regulations were put in place by the government to make reverse mortgages a viable choice for all house-rich, cash-poor seniors and boomers.

It is important to remember a reverse mortgage is a loan. It is a loan collateralize by an asset you currently have – your home. In most cases, your collateral will be used to satisfy the loan. In the end, as with any loan, you will owe more than you owed in the beginning.

Here’s one of the reasons a reverse mortgage is a good idea. If you do not remain in the house long (unexpectedly) you had a lot of cash to use in the last few years. If you do remain in the house a long time, you likely got a good deal because you remained in the house inexpensively. Living in the house for five to fifteen years, which is fairly average, is not more than a middle of the road deal for you. That said, if you are house-rich and cash-poor, there may not be other choices. We recommend speaking to a reverse mortgage lender about this, which you can do by clicking here.

Reverse mortgage rates from the Reverse Mortgage Page

Reverse mortgage rates are the same for all reverse mortgage lenders. The true cost of different reverse mortgage programs, however, vary based on the different program or product.

Reverse mortgages may have fixed or variable rates. In practice, however, all true reverse mortgages have variable interest rates tied to the variable US Treasury rate. The lender margin, which varies very little from company to company, is added to the variable treasury rate to determine the rate to the borrower. These rates are adjusted on an annual, semi-annual, or monthly basis.

The reverse mortgage TALC rate is the total annual loan cost. Your reverse mortgage lender will provide this.

How does the Reverse Mortgage Rate impact your borrowing?

We will use an example to demonstrate:

Betty, age 76 and widowed, gets a reverse mortgage on her home. The house is worth $200,000 and she is able to receive up to $100,000 from the reverse mortgage. She elects to get the full amount and takes it as a lump sum. The origination fee and costs total $2500 and she will owe $360/year to service the loan. Based on an interest rate of 7.5%, she will owe just over $110,000 at the end of the first year. If Betty passes away in ten years, she will owe just about $200,000 assuming interest rates only have relatively minor variations. Her heirs will inherit whatever the amount the house has appreciated in value minus the cost to get the house sold. Of course, if Betty lives to be 98, there will probably be nothing left for her heirs, but she will have been able to live in her home for a long, long time with some cash in hand. In this case, Betty would get the best end of the deal.

The above is just a hypothetical example to illustrate how reverse mortgage rates impact the life of the reverse mortgage loan. Every specific situation will be slightly different.

Reverse mortgage rates do not change based on borrower profile. There is no negotiating and good credit or financial reserves make no difference. These regulations were put in place by the government to make reverse mortgages a viable choice for all house-rich, cash-poor seniors and boomers.

It is important to remember a reverse mortgage is a loan. It is a loan collateralize by an asset you currently have – your home. In most cases, your collateral will be used to satisfy the loan. In the end, as with any loan, you will owe more than you owed in the beginning.

Here’s one of the reasons a reverse mortgage is a good idea. If you do not remain in the house long (unexpectedly) you had a lot of cash to use in the last few years. If you do remain in the house a long time, you likely got a good deal because you remained in the house inexpensively. Living in the house for five to fifteen years, which is fairly average, is not more than a middle of the road deal for you. That said, if you are house-rich and cash-poor, there may not be other choices. We recommend speaking to a reverse mortgage lender about this, which you can do by clicking here.

Reverse mortgage rates from the Reverse Mortgage Page

Reverse mortgage rates are the same for all reverse mortgage lenders. The true cost of different reverse mortgage programs, however, vary based on the different program or product.

Reverse mortgages may have fixed or variable rates. In practice, however, all true reverse mortgages have variable interest rates tied to the variable US Treasury rate. The lender margin, which varies very little from company to company, is added to the variable treasury rate to determine the rate to the borrower. These rates are adjusted on an annual, semi-annual, or monthly basis.

The reverse mortgage TALC rate is the total annual loan cost. Your reverse mortgage lender will provide this.

How does the Reverse Mortgage Rate impact your borrowing?

We will use an example to demonstrate:

Betty, age 76 and widowed, gets a reverse mortgage on her home. The house is worth $200,000 and she is able to receive up to $100,000 from the reverse mortgage. She elects to get the full amount and takes it as a lump sum. The origination fee and costs total $2500 and she will owe $360/year to service the loan. Based on an interest rate of 7.5%, she will owe just over $110,000 at the end of the first year. If Betty passes away in ten years, she will owe just about $200,000 assuming interest rates only have relatively minor variations. Her heirs will inherit whatever the amount the house has appreciated in value minus the cost to get the house sold. Of course, if Betty lives to be 98, there will probably be nothing left for her heirs, but she will have been able to live in her home for a long, long time with some cash in hand. In this case, Betty would get the best end of the deal.

The above is just a hypothetical example to illustrate how reverse mortgage rates impact the life of the reverse mortgage loan. Every specific situation will be slightly different.

Reverse mortgage rates do not change based on borrower profile. There is no negotiating and good credit or financial reserves make no difference. These regulations were put in place by the government to make reverse mortgages a viable choice for all house-rich, cash-poor seniors and boomers.

It is important to remember a reverse mortgage is a loan. It is a loan collateralize by an asset you currently have – your home. In most cases, your collateral will be used to satisfy the loan. In the end, as with any loan, you will owe more than you owed in the beginning.

Here’s one of the reasons a reverse mortgage is a good idea. If you do not remain in the house long (unexpectedly) you had a lot of cash to use in the last few years. If you do remain in the house a long time, you likely got a good deal because you remained in the house inexpensively. Living in the house for five to fifteen years, which is fairly average, is not more than a middle of the road deal for you. That said, if you are house-rich and cash-poor, there may not be other choices. We recommend speaking to a reverse mortgage lender about this, which you can do by clicking here.

Reverse mortgage rates from the Reverse Mortgage Page

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This entry was posted on Wednesday, April 1st, 2009 at 3:18 pm and is filed under The Basics, featured. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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