Entries Tagged 'Reverse Morgage Information' ↓

Be Sure About Reverse Mortgage Interest Rates Are you at least 62? Want to tap into what is probably your most valuable asset without taking out a home equity loan? Reverse mortgages are the way to go, a way for seniors to get a little extra cash by borrowing against the value of their home without accruing additional debt. Just make sure you know about reverse mortgage interest rates, which aren’t necessarily like other interest rates. Most reverse mortgage interest rates are based upon a one-year U.S. Treasury security rate, meaning the interest rate changes with any fluctuation in the security rate, though it won’t go any higher than a 2% change per year or 5% over the duration of the loan. The other option is a monthly interest rate which is adjusted every month and is capped at a 10% change over loan’s lifetime.

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The acronym “HECM” is associated with a Home Equity Conversion Mortgage. The term reverse mortgage is more commonly used when describing this type of mortgage. Reverse mortgage is definitely a much easier term to remember because it basically describes how the mortgage actually works.

A reverse mortgage is a loan against your home that you do not have to pay back for as long as you live there. The loan can be paid to you in a variety of flexible ways - in a lump sum or in regular monthly payments. The money doesn’t have to be repaid (along with interest) until you die, sell the home, or permanently vacate the house. The equity a borrower has in a home grows smaller over time rather than growing larger. It’s the reverse concept of a traditional home loan. This is obviously why the loan is called a HECM or reverse mortgage.

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