HECM cap5 Reverse Mortgage
AAG has rolled out their new HECM cap5 product. The new program offers improved protection against increasing rates by limiting the maximum rate cap to 5% plus the initial/starting rate instead of the regular 10%. This minimizes the risk of passible interest rate hikes and caps the loan at 5% above the starting/initial rate. The program also offers a lower starting rate compared with a standard adjustable HECM as well.
All payment plan options remain available including the line of credit that grows as you continue living in the home. This program is currently available in Colorado. AAG is offering this program through their retail division and through their wholesale division with their lending partners.
Initial rates on the HECM cap5 can be as low as 2.154%. The initial rate is established by adding the margin(lender margin-2%) plus the 1 month LIBOR rate(index-.154%) When compared with the fixed program at 5.06%(no points), the lower rate is usually another advantage of doing the HECM cap5/10.
- Available for refinance or purchase
- Open-ended loan
- Same loan proceeds as other HECM products
- Same payment options
- No closing costs available
- 5% lifetime cap over initial rate
AAG announcement:
“We are excited to offer a new monthly adjustable-rate HECM solution, featuring a lower lifetime interest rate cap, to our growing suite of products and look forward to launching proprietary products in the coming weeks and months,” said Kim Smith, AAG senior vice president, Wholesale Lending. “The HECM CAP5 provides AAG Wholesale partners more options to meet their clients’ specific needs.”
