Ten-Year LIBOR SWAP Could Spell Gains for Reverse Mortgage Borrowers
"Your "I CAN" is more than your IQ.”–Robin Sharma
EFFECTS ON THE REVERSE MORTGAGE MARKET
RATES ARE CURRENTLY IN YOUR FAVOR
According to Dan Hultquist (FAR) "When long-term rates drop, new HECM prospects will either qualify for higher principal limits or have more flexibility in pricing (i.e. lender credits or broker credits).”
The base LIBOR index for federally-insured HECM loans still remains low.
Central banks slashed their benchmark interest rates to near zero.
Margins can still afford eligible homeowners a significant source of cash flow.
You may choose to utilize a standby line of credit which will grow over time.
Low short term rates also benefit borrowers as the loan’s balance will grow slower during this period.
Originators may be able to reduce upfront costs to a borrower while still providing maximum principal limits.
“We are now offering both expected rates and note rates that are comparable to, or lower than, conforming rates,” Hultquist says. “This is something to celebrate. We now have the tools to solve critical cash flow and liquidity issues for homeowners at their time of need.”