| Many borrowers look at a few of the important | | | | 3.5%. The Independence Plan available through All |
| aspects of their proposed jumbo reverse mortgage. | | | | Reverse Mortgage Company offers a 2.1% margin as |
| How much money will they get, How much are the | | | | an option for borrowers who are concerned with |
| fees, what is the starting interest rate but so often | | | | interest rates and how they will affect the future |
| these are about the only items they concern | | | | equity. |
| themselves with. | | | | The margin is the hidden factor. The origination fee for |
| Some borrowers also insist on getting fixed rate | | | | many of the jumbo proprietary programs is around 2% |
| reverse mortgages, but the fixed rates typically insure | | | | of the principal lending limit, while the fee on the |
| the borrower of paying an interest rate way above | | | | Independence Plan is .5% of the appraised value, which |
| the current adjustable rates available and based on | | | | usually works out to the borrowers paying about half |
| the averages of the indexes upon which the jumbo | | | | for the Independence Plan. |
| rates are ultimately determined, borrowers would have | | | | If you are considering a reverse mortgage on a jumbo |
| to go back over 17 years to find a historical average | | | | or proprietary program, take a good look at the |
| that would even approach making the higher fixed | | | | amortization schedules. Borrowers can save |
| rates worthwhile. In other words, borrowers choosing | | | | thousands of dollars over the years by choosing a |
| today's jumbo fixed rates would have lost money to | | | | program that accrues interest at a lower rate and this |
| their adjustable counterparts as an average for more | | | | area of the decision is so often over-looked. |
| than the last 17 years. No one can predict the future, | | | | If your main motivation is to get the most money |
| but the last 17 years include some very volatile | | | | available and you aren't worried about the interest |
| markets and the borrowers would still be worse off at | | | | rates or the effects on your equity, then you should let |
| today's low rates with a fixed rate than going through | | | | your reverse mortgage specialist know this up front. |
| those volatile markets with an adjustable rate. | | | | Fixed rates also sound great, but if you have to pay 8 |
| So for the borrower who is really trying to determine | | | | or 9 percent or more to get one, and based on |
| the lowest cost reverse mortgage for proprietary or | | | | historical averages the rates never pay off by having |
| jumbo reverse mortgage programs, they need to also | | | | it fixed, you have to ask yourself if the higher fixed |
| review the missing element the margin. The margin is | | | | rates are worth it. But if you want a program that will |
| the amount that is added to the index to determine at | | | | give you an excellent initial draw while still accruing |
| what rate the loan will accrue interest over the life of | | | | interest at the lowest rate possible, then the |
| the loan. | | | | Independence Plan with the 2.1% margin may be just |
| In other words, two loans with the same index will | | | | what you were looking for. |
| accrue interest differently if one has a lower margin. | | | | Any way you choose to go, a qualified reverse |
| Many reverse mortgages such as the Financial | | | | mortgage specialist is there to be sure your needs are |
| Freedom Cash Advantage program have a margin of | | | | met and should be willing to show you all options. |