I'm fully aware of the fact I may sound like a broken record, but I think (actually I know), it's worth it.
Because you read every single one of my posts, you are now fully aware of what lower rates mean for reverse mortgage borrowers.
BUT, just in case you've been REALLY busy and haven't had the chance to stalk my blog, I'm going to give you the overview of how important it is that rates are low.
Here's comes the part where I try to sound smart. Emphasis on TRY....
As the "expected rate" goes down, the Loan To Value a borrower can access goes up. The expected rate changes every Tuesday and it get's locked in once a borrower is assigned an FHA case number. When the reverse mortgage is ready for settlement, the lender compares the expected rate that was issued at the case number assignment, to the expected rate at closing. Which ever rate is LOWER and yields the borrower more money is the one that's used. The great thing about this feature (known as the principle limit lock), is if rates go UP from when the case number is assigned, the borrower is protected and the lower rate that was used at the case number assignment is utilized.
What's this mean in simple English?
If rates go UP after a case number is assigned the borrower is protected.
If rates go DOWN after a case number is assigned the borrower gets the lower rate.
Now with all of this in mind, we're continuing to see interest rates drop. When I posted last month, they were the lowest they'd been in a year. As of today's rates they're the lowest they've been since December 2017!!
As I wrote last month, this is important for multiple reasons:
- If you're using the reverse mortgage to stay in your current home, you now qualify for more proceeds.
- If you're using the reverse mortgage for the purchase of a new home, your funds needed for closing went down. Click here to learn more about the HECM for Purchase.
- If you were short in qualifying for the reverse mortgage because of existing liens and not having enough equity, you may now qualify.
- And last (but not least), regardless of how you're using the reverse mortgage - lower interest rates mean less interest you pay.
Here's the bottom line.....If you've been considering the reverse mortgage, now's the time. You know where to find me for more information. 🙂