Do the Interest Rates Flucuate/Remain the Same?

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Do the Interest Rates Flucuate/Remain the Same?

Post  Lizzy B on Thu Feb 07, 2008 12:22 pm

Do the interest rates on a reverse mortgage flucuate, remain the same or what?

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Re: Do the Interest Rates Flucuate/Remain the Same?

Post  Linn F on Thu Feb 07, 2008 12:56 pm

Since you are not required to make any payments, for as long as you have your HECM Reverse Mortgage, the original amount you have borrowed will grow at the current interest rate. This rate is typically adjustable and tied to the one-year U.S. Treasury Security. Fixed rate HECM Reverse Mortgage loans are available but usually require upfront draws. Now this is on the HECM you know cause that is what I have you'll have to check on any others.

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Re: Do the Interest Rates Flucuate/Remain the Same?

Post  Sun Shine on Fri Feb 08, 2008 1:54 pm

Since you are not required to make any payments, for as long as you have your HECM Reverse Mortgage, the original amount you have borrowed will grow at the current interest rate. This rate is typically adjustable and tied to the one-year U.S. Treasury Security. Fixed rate HECM Reverse Mortgage loans are available but usually require upfront draws.

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Re: Do the Interest Rates Flucuate/Remain the Same?

Post  Paul Jamison on Fri Feb 08, 2008 2:25 pm

Choosing the annual adjustable H.E.C.M. means that the rate will change once each year. Any change in this rate must be the same change that occurred in the index it is tied to (usually the one-year Treasury rate), is limited to a 2% adjustment per year and has a 5% lifetime adjustment cap.

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Re: Do the Interest Rates Flucuate/Remain the Same?

Post  Paul Jamison on Fri Feb 08, 2008 2:26 pm

Choosing the monthly adjustable H.E.C.M. means that the rate will change once every month. Any change in this rate must be the same change that occurred in the index it is tied to (usually the one-year Treasury rate) and is limited to a 10% lifetime adjustment cap.

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