Reverse Mortgage Rates

A reverse mortgage is a powerful financial tool for boomers and seniors that can provide qualifying homeowners with access to the equity built up in their homes. As long as applicants are age 62 years or older and carry enough equity in their homes, approval comes swiftly and with relatively few strings attached. Homeowners who carry reverse mortgages can use their funds to pay off an existing mortgage, make much-needed home repairs, supplement their daily income, or used to purchase a much more expensive home with no mortgage payment. Even better, reverse mortgage funds don't need to be repaid until the home is sold or the youngest borrower passes.

Why Do Reverse Mortgage Rates Matter?

Regardless of the size of a given reverse mortgage, it will accrue interest in a predictable manner. As long as you carry an outstanding balance, you will receive a monthly statement that outlines the rate and amount of interest that accrued on the loan during the previous billing period.

Unlike credit cards, mortgage loans and most other forms of consumer credit, reverse mortgages can carry outstanding balances for long stretches of time without incurring punitive fees or penalty interest. However, accumulating interest invariably causes these balances to grow over time. Homeowners who take advantage of low interest rates may save thousands of dollars over the lifespan of their reverse mortgages and stretch the equity in their homes to impressive lengths. Remember, having a reverse mortgage does not mean you can’t make mortgage payments, it simply means you do not have to.

Factors That Affect Reverse Mortgage Rates

Most reverse mortgages come with adjustable rates that fluctuate in response to several factors. These may include:

  • The prevailing LIBOR rates that banks use to set rates at which they pay and receive interest

  • General economic conditions

  • The health of the housing and mortgage markets in the area in which the loan is issued

Some reverse mortgage loans come with fixed-rate structures and issue their payments in lump sums. Rates on these types of reverse mortgages depend on market conditions at the time of the loan's closing. Homeowners who wish to get the best value on a fixed-rate reverse mortgage should speak with a seasoned reverse mortgage specialist at The ARAMCO Group.

Federal Housing Administration Mortgage Insurance

The Federal Housing Administration, most commonly known as the FHA, provides insurance to FHA approved lenders. It is the largest Government backed insurer of mortgages in the world since it was founded in 1934.

FHA mortgage insurance provides FHA approved lenders protection from homeowners defaulting on their mortgage loans. The FHA will pay the lender a claim in the event of a homeowner’s default.

San Diego Mortgage Rates: Historic and Future Trends

Historically, changes in San Diego mortgage rates have mirrored similar fluctuations in other regions of the country. During the middle of the 20th century, an extended period of low rates contributed to the massive construction boom that transformed San Diego from a sleepy port into a modern metropolis. During the inflation-fueled economic downturns of the 1970s and 1980s, rates rose considerably. The housing bust of the early 1990s engendered another extended period of low rates. Recently, rock-bottom interest rates have revitalized the region's housing market and encouraged many homeowners to explore their reverse mortgage options.

Next Steps

It's easy to qualify for a reverse mortgage. Borrowers need to meet a few basic requirements:

  • Aged 62 or older

  • Significant equity in a primary residence

  • Attend a HUD-approved financial counseling session

  • A desire for financial flexibility and freedom throughout retirement.

Find the Best Reverse Mortgage Rates in San Diego

To learn more about reverse mortgage rates in San Diego and secure access to the industry's best loan products, contact us. You may also speak directly with a Certified Reverse Mortgage Professional (CRMP) by calling 877-700-0942.