What is the HECM Fixed Rate Program?

The HECM (Home Equity Conversion Mortgage) "fixed rate" is simply a reverse mortgage with a fixed rate of interest.  The rate can vary slightly from company to company but most are in the range of 5.5% interest.  The company that I work for has a rate of  5.49%. 

The benefits of a fixed rate HECM  loan are:

• The interest rate remains fixed for the entire life of the loan
• Depending on the adjustable rate (LIBOR) reverse mortgage, you may get more money from the fixed rate HECM loan program
• The same easy qualifications apply (no income or credit requirements)
• Because the rate is fixed, you can more accurately project what the loan balance will be in the future

The Downside of the HECM Fixed Rate Program

The only downside of the HECM fixed rate is the requirement that you have to take all of the money available in one lump sum.  There are no other payment options as there are on the LIBOR adjustable rate program.

You see, the way reverse mortgages work is that the government basically dictates to the lender how much money we can loan to you.  We have to make all of the money that you qualify fo available to you, wether you want it or not.  The LIBOR adjustable rate program allows you to only  take the amount you want and place the rest into a line of credit or a monthly payment plan if you don't want it all at once.  However, the fixed rate does not offer those options.  If you qualify for $100,000, you must take it all in one lump sum, even if you don't need or want it.

The HECM fixed rate program is perfect for the people who need to take as much money out as possible on the reverse mortgage program (i.e. to pay off an outstanding mortgage or other bills).  It will free up the money that you might otherwise have to put out every month and improve your standard of living.  It can really help to provide stability to your finances as well as you life.

Please call me with any questions about the HECM fixed rate reverse mortgage program and I can run some numbers for you and go over all the pros and cons to make sure that you have all the information to make an educated decision.  Please call me at the toll free number below, or on my direct line at (303) 467-7821.