There are two different types of rates that are available on most loans: variable (or adjustable) rates on fixed rates. There are pros and cons to both of these types of rates but many people find that the fixed rate is the best deal for them. This was an upsetting fact to many reverse mortgage borrowers in the past because these loans weren't readily available in a fixed rate format. However, the HUD has recently approved the first fixed-rate reverse mortgage loans for lenders to begin offering them to their borrowers.
There remain problems with the fixed rate as it applies to reverse mortgages. They have different features and may cost more to obtain initially. However, they may save costs for the borrower in the long run and have the potential to provide more opportunities for certain people. In order to determine what type of reverse mortgage rate is right for you, you should always speak to a financial planner with an unbiased perspective on the situation.
Question of the Day: Cast your vote - fixed rate or adjustable rate?
