Reverse Mortgage Pro - Mortgage.Shop LLC has departments set up to rapidly process nearly all types of home loans, however we are proud to be one of the largest privately owned Reverse Mortgage Lenders in the country and will always stay on the cutting edge when it comes to offering new options as they become available. Please discuss your options with us so that we can help you make the decision that best meets your short and long term needs.
FHA HUD HECM Plans
A Home Equity Conversion Mortgage (HECM) is a federally insured reverse mortgage. Almost all reverse mortgage made in the U.S.A. are HECM’s. The Federal Housing Administration (FHA) sets limits on how much a HECM reverse mortgage lender may lend you based on your age, your home’s value, its location and the current interest rates. HECM loans give you a wide range of options in how you may take your money out of the plan.
Fixed Rate HECM
Since the Fixed rate plan was recently allowed by FHA more and more seniors choose to use this option simply for the knowledge that the rate of interest on their loan will never increase over their lifetime however this plan has fewer options on how you take your money, in most cases you are required to take your money all in a lump sum at closing. When national fixed interest rates are low, this option also provides you more money than the other plans.
Variable Rate Plans
We offer all of the variable programs based on the LIBOR and CMT indexes. These programs in most cases are used when the senior plans to keep the loan open for a shorter period of time, when fixed interest rates are higher and more money is available with this plan or when it makes more sense to have a credit line or monthly deposit option. Borrowers are generally protected from wide fluctuations in interest rates by periodic and lifetime interest rate caps. Most Variable reverse mortgages close using the more stable Libor index.
The LIBOR or London Inter Bank Offering Rate is an international index which follows the world economic condition. It allows international investors to match their cost of lending to their cost of funds. This is generally a more stable index then both the CMT and Prime rate.
The CMT or Constant Maturity Treasury index are based on the Yields on Treasury securities at "constant maturity" are interpolated by the U.S. Treasury from the daily yield curve, which is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. The CMT indexes are volatile and move with the market.
