Posted on October 11th, 2010
Reverse Mortgages are providing more money
With the new changes and programs introduced on October 4th reverse mortgages are currently providing more money than they were a week ago. This is due to HUD lowering the floor limit used for the Expected Interest rate. Click here to read more on reverse mortgage interest rates.
Most reverse mortgage programs are currently below the Expected Rate floor set by HUD, which is now set at 5.0%. If interest rates start to go up, and are higher than the 5.0% floor, it will impact how much available money there will be. This is something homeowners considering to apply for a reverse mortgage have to be concerned with. Since the expected rate is not far below 5.0% on a couple of the adjustable rate programs, a slight increase in rates will start calculating less money. Our goal is to maximize the amount of money available for you and this is something you need to consider.
This reduction in the Floor Limit also caused a reduction in the Fixed Rate Reverse Mortgages available. Typically, the fixed rate reverse mortgages are set at the Floor Limit in order to calculate the most money. Then the closing costs need to be considered in determining the net available monies. Our goal is to keep closing costs as low as we can in order to maximize the amount of money you get.
One last option is to look into setting up a line of credit and letting it sit there and grow while rates are below the floor limit, which will maximize the amount of money available. If rates go up after you get a reverse mortgage your line of credit will grow at this increased rate as well. If rates go up before you establish your line of credit you could have less money available due to the higher expected rate at application. This can be confusing and we would be happy to discuss this in more detail as everyone’s situation is unique. We are always committed to helping you make the best decision possible.
Call us today if you would like a free/no obligation consultation with the new program changes.