Choosing Between Fixed and Adjustable Rate HECM Loans

Borrowers who are planning to apply for a reverse mortgage loans are often confused between a fixed rate and adjustable rate Home Equity Conversion Mortgage Loan (HECM).

To clear up any confusion, below is a short description of both types of loan rates:
With fixed rate HECM loans, the interest rate is locked for the entire duration of the loan. The only benefit you can receive from this type of loan is that you will always be aware of the interest rate accrual of the reverse mortgage.

On the other hand, the adjustable rate HECM loans have greater flexibility as you can choose between a line of credit, a lump sum,or a combination of monthly payments. This type of loan is also insured by the government and may be offered at lower interest rates. Moreover, this is for an extended period of time as your interest rate can change, but it won’t affect your monthly lifestyle.

The Reverse Mortgage Group will help you with advice, guidance, and information to consider while choosing between both loan types.