Reverse Mortgage Question: HECM 100 vs. HECM 150

Reverse Mortgage Loan Blog recently received a question concerning Home Equity Conversion Mortgages (HECMs) and the worth of the HECM 150 vs. the HECM 100.  The following question and answer come from an article we posted entitled “Get a Reverse Mortgage on Your Second Home“:

Question:

Are any lenders still offering the HECM 150? Why? It appears that the HECM 100 is much better for the seniors?

Do you agree?

Answer:

There are currently three Home Equity Conversion Mortgages (HECMs) available through reverse mortgages. The three HECMs available are the HECM 150, the HECM advantage, and the HECM 100. At the present time, the HECM 100 is the best loan choice for the senior because the Expected Interest Rate is the lowest, resulting in more money available for the borrower. However, the HECM 150 is still available because it offers an annual interest adjustment as opposed to a monthly adjustment. The HECM advantage, similar to the HECM 150, has a ‘floating margin’ and can have a negative impact on equity. The senior’s best option is to go with the HECM 100.

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