Rates on Reverse Mortgages Tumble (Week of 2/12/07)
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Reverse mortgage interest rates receded across the board with the most recent rate adjustments annoiunced by the Fed. Rates on the HECM monthly- and annual-adjusting loans, together with the Fannie Mae HomeKeeper reverse mortgage all tumbled:
| Reverse Mortgage Rates | |||||
|---|---|---|---|---|---|
| Product | This Week | Last Week | 52-Week Avg |
52-Week High |
52-Week Low |
| HECM Monthly Adjusting | 6.57% | 6.60% | 6.50% | 6.77% | 6.20% |
| HECM 100 Monthly Adjusting | 6.07% | 6.10% | n/a | n/a | n/a |
| [tag]HECM[/tag] Annual Adjusting | 8.17% | 8.20% | 8.10% | 8.37% | 7.80% |
| [tag]Fannie Mae[/tag] [tag]Homekeeper[/tag] | 8.625% | 8.75% | 8.577% | 8.75% | 8.00% |
Of course, the news on reverse mortgage interest rates got even better with the announcement that Wells Fargo (the largest reverse mortgage lender) has joined BNY Mortgage in lowering the margin on monthly-adjusting HECM loans from 1.50% to 1.00%. The margin cuts by these two major lenders have set a new standard for monitoring reverse mortgage rates. In coming weeks, we will treat the lower-margin products as the standard HECM product.
[tag]Reverse mortgages[/tag] are specialized [tag]mortgage products[/tag] available only to [tag]senior citizen[/tag] homeowners. HECMs are the most popular type of reverse mortgage. Interest rates for both annual- and monthly- adjusting HECM loans are indexed to the one-year constant maturity [tag]US Treasury rate[/tag].
Under a reverse mortgage, the lender makes loan payments to the borrower and the loan is repaid when the house is sold or the homeowner dies. The monthly or annually adjusting interest rate determines how fast the loan balance grows.
Visit our reverse mortgage interest rate tool for further information and analysis.
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