If you are in the market for a reverse mortgage, think back to the process you went through when you shopped for your traditional mortgage looking for the lowest interest rates. Shopping for a reverse mortgage is really no different, and finding the best reverse mortgage rates will allow you to save thousands or tens of thousands of dollars in repayment costs when you finally leave your home for good.
Even though sorting through the many available offers can take a good amount of time success in finding the lowest reverse mortgage rates will make your effort some on the best reimbursed work of your life. You can ease your task by using the reverse mortgage calculators you’re sure to find on one of the many Internet reverse mortgage lender sites.
You will be given three options, or a combination of them, when it comes to how you receive the proceeds of your reverse mortgage loan: a single cash payment; a credit line; or monthly payments. Each of these options will be subject to the same reverse mortgage rates, and those rates will be determined by the US Treasury rate. Almost all reverse mortgages are adjustable rate mortgages, so the interest charged on the balance of your reverse mortgage loan will fluctuate as the prime lending rate does. Your lender can adjust your rate from as often as once each month to as seldom as once each year.
Fixed Vs. Adjustable Reverse Mortgage Rates Fixed rate reverse mortgages, however, are now becoming more common. But a fixed-rate reverse mortgage, while it may spare you from having your reverse mortgage rates at the mercy of the Federal Reserve, will limit you options in receiving your loan to getting it in a single cash payment. There are neither lines of credit nor monthly payments, so you will be charged interest on the full amount from the day you take your loan.
In 2007 the prime rate charged to reverse mortgage lenders was averaging just above 6%, and borrowers paid the additional margin on which reverse mortgage lenders make their profits. When you shop for lenders, you need to determine the margins being charged by each one and try to get the lowest margin possible.
There is on big difference between a fixed reverse mortgage rate you will receive and the fixed traditional mortgage rate for which you may have been eligible: your fixed reverse mortgage rate will neither be related to you credit record, nor to your income. Being a low income or fixed income senior will not deprive you of getting a low rate reverse mortgage as long as you have paid off, or almost paid off, your home. It is for limited income seniors, in fact, that reverse mortgages were originally established.
Finding Your Lender Look for information on current reverse mortgage rates both on the Internet and at the reverse mortgage lenders in your area. It’s a good idea to begin with an online search, and when you have found the lowest online reverse mortgage rates, make appointments with your area lenders and use the online rates as bargaining chips.
You can get a better idea of reverse mortgage rates by researching both online and brick-and-mortar reverse mortgage brokers; many brokers have both websites and offices. Find the best online rate you can, then take it to the reverse mortgage lenders in your area and use it as a negotiating tool if necessary.