HECM Reverse Mortgage Rates for 2014.
The good news for seniors looking into the Home Equity Conversion Mortgage in 2014 is that interest rates on these loans are still very low. Consider the fact that you are able to eliminate current mortgages with an HECM reverse mortgage and from day 1 have savings by simply going into a lower rate loan. If you do not have a mortgage but are looking for cash in your retirement with extremely low rates, you can borrow for cheap. For most, the home value will appreciate enough to cover any interest costs as the loan increases over time and thus protecting the equity that has not been touched. Many seniors are now considering taking a reverse mortgage to boost their retirement income, pay off any debts, or to be able to live in the home until they are ready to pass away.
The interest rate you receive on your reverse mortgage loan will be to most important factor in determine how much you will be able to receive and how much will build up over the course of the loan in terms of interest. Just as with a forward mortgage (think of a refinance) where you would want to secure a low fixed rate this is the same concept with the reverse mortgage. The higher the interest rate, the less money you are able to take out with a reverse mortgage. Choosing the wrong interest rate or program can be detrimental to an average seniors retirement, hence our focus in helping making those decisions of which loan to pick. Reverse mortgages are not easy to understand, and the loan packages are very long, give us a try to help you figure out how to get the best rate.
The HECM lenders will be giving you a portion of the home’s equity upfront at a pre-determined and agreed rate (and under the program payout you choose as well). This varies wildly from bank to bank; this is where we started from with the concept of comparison shopping top HECM reverse mortgage banks to secure you the lowest interest rate possible.
***FHA (FEDERAL HOUSING ADMINISTRATION HAS ANNOUNCED ON CHANGES TO THE HECM PROGRAM WHICH WILL IMPACT THE FIXED RATE OPTION (STANDARD HECM REVERSE MORTGAGE). IF YOU HAVE A MORTGAGE BALANCE AND ARE CONSIDERING BORROWING THE MAXIMUM AMOUNT UNDER A LUMP SUM FIXED RATE HECM STANDARD YOUR WINDOW OF OPPORTUNITY IS NOW UNTIL THE PROGRAM IS ELIMINATED ON APRIL 1ST 2014. *** this is the right time to a reverse mortgage quote if you want a lump sum option at a fixed rate, after April 1st 2014 only the adjustable rate or fixed rate HECM Saver will exist.
Current HECM Reverse Mortgage Rates 2014
HECM fixed reverse mortgage: lowest rates 4.5%
HECM fixed saver reverse mortgage: lowest rates 4.75%
HECM libor ( adjustable ): lowest rates 2.5%
HECM Saver Libor ( adjustable ): lowest rates: 2.50%
servicing fee: $0 ( some lenders charge $15-30 month which adds to thousands over loan life)
FHA lending limit: $625,000 for 2014 ( Federal Housing Administration )
Total Interest Rate charged (APR) to a reverse mortgage is the Margin + Index + Monthly Mortgage Insurance of 1.250%.
The HECM rates will allow you to compare loans with other lenders, it will ultimately determine your borrowing costs, how much money you will receive (upfront or for lifetime income), and whether it is a good time even to consider getting a reverse mortgage. As of January 21st, 2014 rates are still at all time low’s so it is still recommended that seniors consider the reverse mortgage loan option now as locking in a low rate will save you or allow you to keep more equity. Besides the interest rate, you should consider the origination fees involved with your loan as some lenders will not charge you an origination fee.
*** Trying to perfectly to time the interest rates market can backfire – we can advise that when rates are as low as they are they usually, or they can only increase from here – a .25% interest rate difference can lead to substantial savings long term. ***