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Reverse Mortgage Annual & Monthly Adjusting Interest Rate Options

 

The HECM adjustable reverse mortgage interest rate options include a monthly adjusting and annual adjusting option.  The benefit of the annual option are lower lifetime caps on the interest rate plus it includes annual caps. The monthly option has a 10 point cap above the start rate and no annual cap.

With the annual adjusting option, the interest rate is fixed for one year at a time and the adjustment the next year cannot increase more than 2 points. The lifetime cap is 5 points above the start rate. The key advantages of the HECM variable interest rate are that a line of credit or monthly payment is allowed.  That is not available with the fixed rate as a lump sum must be drawn.  The line of credit growth is a definite advantage as the growth in the credit line can be quite substantial over time. The increase in the LOC is the same accrual rate as on the loan balance.  It is based on the current rate plus the mip rate.  I will provide an amortization schedule that projects this growth and you will be very pleased with the compounding growth of available funds.

To receive an analysis for this new option Call Maggie at 800-489-0986

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