Save Money on Lenders Margin

Reverse Mortgage Home >>> Lenders Markup

The margin is the amount that lenders or loan originators add to the base interest of your loan. The base rate is set by the government.  The margin cap generally ranges from 1.5 and 5 percent.  Each type of reverse mortgage loan is capped differently; your total interest rate will be a combination of the base rate plus the margin rate.

As you can guess, this is another opportunity to comparison shop for your interest rate.  This will vary from lender to lender.  This is similar to a regular mortgage.  You can shop for the loan and interest rate that is best for your situation.

Margin limits are a way to protect seniors from greedy and unethical loan originators.  Dictating a rate range prevents excessively high rates from being charged to loan applicants.  The higher the margin rate the less cash you’ll receive from your reverse mortgage loan.  A lower margin equates to more cash in your pocket.

The margin rate doesn’t affect your payment amount but it does affect the amount you can borrow in the first place.

Here is one example of how shopping for a lower margin rate can mean more money for you. This example is based on a $200,000 home:

	HECM		HECM
	300	vs.	325
Principal Limit.....	$117,493		$111,889
(The Gross Amount You Can Borrow)